By Josh Katzowitz, WCI Content Director

Maybe it’s just me, but whenever an investor talks about a 60/40 portfolio—where 60% of the investment is invested in equities (which are considered risky but which will likely make you more money in the long run) and 40% is in bonds (which are considered safe but which probably won’t sustain the growth to beat inflation)—it feels like an old-fashioned concept.

The 60/40 idea came to popularity in the 1950s, and it relies on the idea that stocks and bonds are negatively correlated (when stocks go up, bonds go down, and vice versa) and that “spreading out risk exposure resulted in better risk-adjusted performance.” A 60/40 portfolio theoretically ensures that both opportunity and protection are tucked in to your strategy.

Since I became financially literate, I’ve thought 60/40 would work for somebody who’s about to retire but that I’d need way more equity