This Lame Stock Advice Could Cost You 8% Dividends (and Millions in Gains)

When I see people touting the 60/40 portfolio, I kind of feel like Haley Joel Osment’s character in the Sixth Sense . But instead of seeing dead people, I see dead ideas. You likely know what I’m talking about: a portfolio that seeks to automatically balance risk by holding 60% in stocks and 40% in bonds. It sounds sensible enough, but history shows that people who invest by this rule have been leaving a lot of money on the table for a long time: 60/40 Portfolio Pays Too High a Price for Low Volatility One quick glance at US stocks, seen here in purple through the Vanguard Total Stock Market ETF (VTI), and bonds, in orange through the Vanguard Total Bond Market ETF (BND), shows a problem.… Read more