# 60/40 Portfolio

*Saving & Investing — Finicade finance glossary*

The 60/40 portfolio holds 60% equities and 40% bonds, the long-standing default for a balanced investor. It works on the assumption that bonds rise when stocks fall — an assumption that held for most of the last four decades and broke in 2022, when both fell together as inflation and rates surged. That episode didn't kill the design so much as expose what it always was: a bet on stock-bond correlation staying negative.

**Also known as:** 60 40 portfolio, balanced portfolio, classic 60/40

**Related terms:** [Asset Allocation](https://finicade.com/glossary/asset-allocation), [Diversification](https://finicade.com/glossary/diversification), [Correlation](https://finicade.com/glossary/correlation), [Three-Fund Portfolio](https://finicade.com/glossary/three-fund-portfolio), [Rebalancing](https://finicade.com/glossary/rebalancing)

Source: https://finicade.com/glossary/60-40-portfolio