Investment Risks

Debt Ceiling Blowup Could Imperil 60/40 Portfolio

“We’re entering an era of higher market volatility, which has significant implications for the 60/40 portfolio,” says Wei Li, BlackRock Global Chief Investment Strategist. With the US debt ceiling fight looming and political polarization high, market anxiety is rising. Despite historical odds suggesting a rebound, new risks like geopolitical tensions, inflation, and economic policy shifts could challenge the traditional 60/40 investment strategy. As we navigate this volatile landscape, investors must prepare for potential simultaneous sell-offs in stocks and bonds, threatening the stability and success of conventional portfolios.