For decades, the 60/40 portfolio has been the foundation of financial planning. Sixty percent stocks for growth, forty percent bonds for stability. Your advisor probably put you in some version of it the day you walked through their door. It was simple, it made sense, and for a long time, it worked.
Then 2022 happened.
The year the 60/40 portfolio got blown up. Stocks dropped — that part wasn't a surprise. But bonds, the part of your portfolio that was supposed to catch you when equities fell, dropped right alongside them. The hedge that advisors had promised for years simply didn't show up when it mattered most. Instead of cushioning the blow, bonds doubled down on the losses.
That should have been a wake-up call for the entire industry. For some of us, it was.
The Problem Isn't New — We Just Ignored It
I've been in financial services since 2007, and I'll admit — I used the 60/40 model early in my career. It's what we were taught. It's what every allocation model was built on. You'd move the slider a little depending on risk tolerance — maybe 70/30 for the aggressive client, 50/50 for the conservative one — but the core idea never really changed. Bonds were the safety net. Period.
But I was never fully comfortable with it. I've always been influenced by Nick Murray, who made the case that the best path to long-term wealth is through equities. That always stuck with me. Over the years, I found myself drifting toward more equity-heavy portfolios, and the clients who came along for the ride had success.
What 2022 did was confirm what I'd been sensing for years: bonds have started to move more in line with equities than inversely. The fundamental assumption behind the 60/40 — that stocks and bonds move in opposite directions — has been eroding. And when it finally broke down in spectacular fashion, a lot of people's retirement timelines got pushed back by years.
To be clear, bonds didn't suddenly become "bad." They did exactly what interest-rate-sensitive instruments do when rates rise sharply. The problem isn't that bonds malfunctioned — it's that many investors were relying on them for a job they're no longer well-suited to perform. For decades, bonds provided a reliable counterweight to equities. That relationship has become far less dependable, and pretending otherwise doesn't serve anyone.
The question I had to ask myself was simple: as a fiduciary, am I truly serving my clients by telling them bonds are the best place for stability and income?
I had to be honest with myself. The answer was no.
So If Not Bonds, Then What?
This is where most people expect me to pitch some complex alternative investment or exotic strategy. I'm going to disappoint you — because the answer is actually simpler than what you're probably doing now.
Here's how I think about it: equities are for growth. That's what they do. If you're trying to build wealth over time, that's where your money needs to be. There is no substitute.
But when it's time to take chips off the table — when you need stability, when you need guaranteed income in retirement — why would you use an asset class that just proved it can't reliably do that job? Instead, I use annuities. Not as a growth tool. Not as some magic product. As exactly what they are: boring, reliable, and guaranteed.
Let the equities do the growth. Let the annuities do the guaranteed.
That's it. Every product used for its exact purpose. No square pegs in round holes.
Annuities aren't perfect, and I'm not going to pretend they are. You give up some liquidity. You're making a conscious trade — flexibility in exchange for certainty. But when the goal is income you cannot afford to miss or stability you cannot afford to lose, that trade can be entirely rational. The key is knowing when that trade makes sense for your specific situation and when it doesn't.
"So You're Just an Annuity Salesman Now?"
I've heard it. When I first started sharing this philosophy with colleagues and clients, that was the reaction. They couldn't see past the product to the principle behind it.
Here's the thing — I'm not. And the best way I can prove that is with a real example.
I work with a teacher who receives a substantial guaranteed pension in retirement — nearly her entire working salary. When we sat down and looked at her situation, annuities made zero sense. She already had all the guaranteed income she'd ever need. So we kept her 403(b) entirely in equities. In good years, she takes some off the top for a vacation, a new car — the fun retirement money. Her pension handles the guarantees.
That's the scenario I try to create for every client. What are your base income needs? What guaranteed sources do you already have? And what's the gap we need to fill? For some people, an annuity fills that gap perfectly. For others, it's unnecessary. The answer depends entirely on your situation — not on what product pays me the highest commission.
What This Looks Like in Practice
Say you're a couple in your late fifties, about five years from retirement. You've got a solid nest egg — maybe north of a million dollars — sitting in a traditional 60/40 portfolio your advisor set up years ago. You can see the finish line. The question is whether your current allocation is the right one to get you there, or whether it's setting you up for a stumble.
Five years out is exactly the right time to start thinking about taking chips off the table. But the first thing we do isn't move money around — it's ask questions. What are you worried about? What does your income need to look like in retirement? Do you have pensions, Social Security, other guaranteed sources? What do you want your life to look like in five and ten years?
From there, one approach might be moving a portion into a guaranteed annuity. The rates on some products are comparable to what you'd get from bond funds, with one critical difference — there is no risk of market downturn. If 2022 happens again in year three of your five-year countdown, your retirement plan doesn't get derailed. You don't lose sleep. Your bills are covered by guaranteed income, and the rest of your money stays in equities where it can continue to grow and stay liquid.
Compare that to the bond allocation that was supposed to protect you but moved in lockstep with the stock market at the worst possible time.
The Bottom Line
I'm not here to tell you bonds are evil or that every advisor using them is wrong. What I am saying is that if something quits working the way it was designed to, you find a new alternative. That's the time we are in right now.
The mistake isn't owning bonds. The mistake is asking market-priced assets to provide certainty when certainty is the goal.
This isn't the only way to build a portfolio. It's the way I do it — because it aligns assets with jobs instead of hoping correlations behave.
The 60/40 portfolio was built for a different market environment — one where bonds reliably moved opposite to stocks and interest rates were on a decades-long decline. That world has become far less reliable, especially when it matters most. The advisors and firms that acknowledge this and adapt are going to serve their clients far better than the ones still running the same playbook from 1990.
If you're five years from retirement and wondering whether your portfolio is actually positioned to get you there safely — or if you're already retired and losing sleep over market swings that your "balanced" portfolio was supposed to protect you from — it might be time for a different conversation.
Not everyone will agree with this approach, and that's fine. It's not for everyone. But for the people it clicks with, it changes how they think about their money, their retirement, and their peace of mind.
And if all this article does is open your eyes to a perspective your current advisor hasn't brought up, that's a win.