Classic ’60-40′ mix of stocks and bonds surges in November, heads for best performance since 2020, Bespoke finds

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A traditional mix of stocks and bonds soared in November, setting the 60-40 portfolio up for its strongest monthly performance since 2020, according to Bespoke Investment Group. 

The classic holding of 60% stocks and 40% bonds has jumped about 7.3% this month through Wednesday on a total return basis, Bespoke said Thursday in an emailed note. That would be the best showing for the 60-40 portfolio since April 2020, making it potentially the second-best performance in more than 30 years, Bespoke said. 

The U.S. stock market has seen big gains in November, with the S&P 500 index rising 8.3% and heading for potentially its strongest month since July 2022, according to FactSet data, at last check. Meanwhile, the iShares Core U.S. Aggregate Bond ETF
AGG
was on pace for potentially its biggest monthly total return since December 2008, up around 4.7% in November based on Thursday afternoon trading.

“Despite the 7% surge in November, total returns for the 60/40 stocks-bonds portfolio remain in a drawdown,” said Bespoke. “The total return index is actually lower versus the peak from July, let alone the December 2021 all-time highs.”

The 60/40 portfolio has traded below its “high water mark” for 23 straight months, in its third-longest drawdown since at least 1975, the note shows.

“Unlike the last two, though, this drawdown is because of both equity and bond markets, rather than mostly thanks to equity market declines,” Bespoke said. “The good news is that historically large gains have typically led to further advances for the 60/40 portfolio.”

The U.S. stock market was trading mostly lower on Thursday afternoon, with S&P 500
SPX
slipping 0.2% while the technology-heavy Nasdaq Composite
COMP
fell 0.8% and the Dow Jones Industrial Average
DJIA
climbed 0.8%, according to FactSet data, at last check.

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