Fisher Investments’ Founder, Ken Fisher, Discusses Asset Allocation and the 60/40 Debate

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher shares his thoughts on the conventional recommendation of a 60% equities/40% fixed income portfolio and its viability for most investors. As Ken details, a 60/40 portfolio is likely not the best approach to help most long-term investors achieve their goals. According to Ken, longer investment time horizons require a higher proportion of equities—and time horizons are often longer than investors expect. With longer time horizons, not having enough equities in your portfolio could increase the risk of running out of money in retirement for some investors.

Ken believes an investor’s time horizon and goals are key factors in determining a suitable investment asset allocation. Ken says equities have historically outperformed fixed income over long time horizons—20, 25 or even 30 years—making them a better choice for investors with long-term goals. Ken thinks investors should primarily use fixed income in their portfolios to dampen short-term volatility. Therefore, a higher proportion of fixed income might make sense for investors with shorter time horizons or goals.

Connect with Fisher Investments on:

You can also follow Ken Fisher here:

Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.

[nkazmin]

You have a gift for teaching Mr. Fisher. When you talk, I cannot help, but give you 100% of my attention. Thank you for your videos, they are really informative and changed my perspective about money and investing.

[jeffdejeanne]

Great podcast! I have tried to explain this exactly as you have to friends but not nearly as eloquently as you.

[joemc]

Going on 73 with no BONDS, Never had any.

[ryanconnolly]

I very much appreciate the insight. How would you respond to folks who bring up sequence of returns risk as a reason to weight your portfolio more heavily towards fixed income once in retirement? Do you think an 80/20 or 90/10 setup is sufficient enough to reduce the overall volatility of the portfolio and mitigate that risk? I understand the exact solution depends on the size of the portfolio and what they need it to accomplish and for how long, but would you say that not generating a large enough return through retirement is generally a bigger risk than a market downturn early in retirement?

[stiffdrinkfinance]

I agree, although during times of yield curve inversions, it is good to hold short term treasuries, and us the interest to buy equities

[pb]

Volatility is not risk. It is a heartbeat. The market would be dead with no volatility. Flatline.

[gmo]

Yes, depends on person and also estimated length of life left, etc. I would go 100% stocks until 40s. That is just me. Then set that ratio up and then adjust annually which can help u buy low or sell high. Be a robot, if u can. Broad index fund and total bond fund? Or etf. Stock speculation on the side to feed the need that the boring stuff cant satisfy. Need that balance of boredom and then the foolin yourself finding that edge part.

[kodiakgriz]

As highly credentialed competitor.. you are proverbial financial always surgically eloquent..

[nickv]

Not now. Not when interest rates continue to rise and cash is paying 5% at the moment.

[stiffdrinkfinance]

60/40 is not viable since 2022 because 10 year yield seems to be going up long term

[darrenhere]

"mid to late 80's", unless they took the medicine