Traditional 60/40 Portfolio Faces Challenges in Current Market Conditions

The 60/40 portfolio is meant to diversify, but stocks and bonds are highly correlated now, leaving nowhere to hide.

The economy has remained resilient despite aggressive Fed rate hikes, confounding expectations.

Uncertainty about recession odds and the Fed's next moves has increased market volatility.

Strategists say higher yields now make bonds more attractive again in a 60/40 portfolio.

Some suggest tweaking the 60/40, like 50/30/20 with alternatives, but it still has a place.