Trump turbulence throws 60/40 portfolio investment strategy into question

Hugh Chung, Endowus’ Chief Investment Officer, weighed in on the growing uncertainty around the 60/40 portfolio strategy. Traditionally seen as a balanced approach to investing, the allocation of 60% equities and 40% bonds has faced headwinds amid persistent inflation and rising geopolitical tensions. Chung noted that sticky inflation may prompt interest rate hikes, which can negatively impact bond values, while also warning that stagflation could pressure equities. With stock valuations already stretched, it is important for investors to build diversified portfolios across asset classes and geographies.