Ideas
60/40 remains good enough for many investors.
The 60/40 portfolio, 60% equities and 40% Treasuries, is a good-enough balanced portfolio because equities capture enough upside and Treasuries buffer volatility, helping investors stay the course; it has been durable historically, though 2022 showed it can struggle when stocks and bonds fall together.
Full issuance implies underweight U.S. equities.
A truly passive full-issuance global financial asset portfolio would be closer to 40% U.S. equities and underweight the U.S. versus foreign equities, because investable index funds are forced to overweight the U.S. relative to total issuance.
Full issuance implies underweight U.S. equities.
A truly passive full-issuance global financial asset portfolio would be closer to 40% U.S. equities and underweight the U.S. versus foreign equities, because investable index funds are forced to overweight the U.S. relative to total issuance.
T-bills create safe liquid reserves.
A T-bill and chill or liquid reserve portfolio of safe short-term assets helps match near-term liabilities and creates behavioral comfort, reducing the chance investors are forced to sell long-duration equities during bear markets; it is especially useful for retirees or near-term spenders.
Gold's sharp run raises future volatility.
Gold has a unique faith-put premium because many investors treat it as money, but after rising 65% in a year, its returns have been compressed into a short period, increasing sequence-of-returns risk and making future returns more volatile.
Real estate faces weak future returns.
Real estate prices boomed on cheap leverage, pulling forward future returns and raising sequence-of-returns risk; he is not optimistic on future real estate prices and sees sideways or weak returns as probable.
Momentum factor remains a real effect.
Cross-sectional momentum, buying past winners expecting continued outperformance, has unusual empirical support and can self-reinforce; in today's market the momentum factor is largely tech, which helps explain why crowding has not killed it.
Trend following offers uncorrelated diversification.
Trend following is a go-anywhere strategy that has been one of the truly uncorrelated return streams versus stocks and bonds, with asymmetric returns, but it can lag for long periods and exposes investors to behavioral biases, so it is best treated as a diversifier rather than a smooth return engine.
Long-term tech growth, but high valuation risk.
Tech and growth have powerful secular tailwinds: large tech companies earn and grow faster than ever, e-commerce and technology penetration can keep rising, and long-horizon investors can buy growth and tolerate volatility; however, high valuations imply high expectations and low margin for error, so short-term sequence risk is elevated.
Alternatives gain appeal after 2022 correlation.
Because 2022 made stocks and bonds highly correlated, traditional 60/40 diversification failed, creating an increasingly compelling argument for alternatives to provide uncorrelated return streams; however, he personally still defaults to simpler portfolios.
This Bloomberg Odd Lots video, published January 12, 2026,
features Cullen Roche
discussing 60/40 Portfolio, SPY, VEA, BIL, GLD, XLRE, MTUM, DBMF, XLK, Growth fund, Alternatives.
10 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Cullen Roche
· Tickers:
60/40 Portfolio,
SPY,
VEA,
BIL,
GLD,
XLRE,
MTUM,
DBMF,
XLK,
Growth fund,
Alternatives
