Thread: Why this old school investing strategy is dead

Original article was from October 2019, and is one of those ideas that, in hindsight, was ever more evidence of an impending top. I do not believe 60/40 is dead.

The popular notion of holding 60% of your portfolio in stocks and 40% in bonds is unlikely to work in 2020 and beyond, contests Bank of America Merrill Lynch Head of the Research Investment Committee Jared Woodard. High consumer debt burdens that restrict risk-taking in stocks, excess bank de-leveraging that reduces the supply of credit, tech disruption and aging demographics are just several of the reasons Woodard tells Yahoo Finance the 60/40 rule — as it’s called on Wall Street — is over.

Basically, they think you should invest in corporate debt instead of government debt. Those "bombed out" cyclical sectors got leveled in February - March and have yet to do much. Many have cut their dividends.

He is particularly bullish on higher yielding dividend stocks in “bombed out” cyclical sectors, short duration high yield corporate bonds and floating rate loans, and high quality municipal bonds.