Examining the 60/40: Building diversified portfolios in 2023

In 2022, Vanguard produced a chart showing US investors lost around 20% on both asset classes. Royal London Asset Management head of multi-asset Trevor Greetham says: "The slide showed there was no year like 2022 even though the scatter plot went back almost 100 years." But, says Greetham, this chart was misleading because it was in nominal rather than real terms. "It is inflation shocks which batter stocks and bonds simultaneously," he adds. Recasting the scatter plot in real rather than nominal terms produced a different picture where 2022 is no longer an outlier - there are s...