A 60/40 portfolio is a classic formula used in investing. It represents a portfolio allocation consisting of 60% equities (usually diversified to make sure the risk is spread out) and 40% fixed income instruments like bonds.
This traditional investment strategy is commonly recommended for moderate-risk investors, due to the ideal balance between risk and return. 60% invested in equities offers a decent potential for solid returns, while the remaining 40% invested in more conservative, low-returning bonds helps to offset potential damage to the portfolio during periods of stock market volatility. As with all investment strategies, this comes with no guarantees and can be adjusted based on individual risk tolerance and investment horizon.
