60/40 Portfolio Annual Returns History
Direct answer: The classic 60/40 portfolio (60% S&P 500 / 40% bonds) has delivered average annual returns of approximately 8-9% since 1928, with significantly lower volatility than all-equity portfolios. The worst year in modern history was 2022 (−16.1%), when rising interest rates caused both stocks and bonds to fall simultaneously. Over any 10-year rolling period since 1928, the 60/40 portfolio has been positive approximately 95% of the time.
60/40 Portfolio Annual Returns (60% S&P 500 / 40% Bloomberg Agg)
| Year | 60/40 Return | S&P 500 | Bloomberg Agg |
|---|---|---|---|
| 2000 | −3.6% | −9.1% | +11.6% |
| 2001 | −4.2% | −11.9% | +8.4% |
| 2002 | −9.6% | −22.1% | +10.3% |
| 2003 | +19.9% | +28.7% | +4.1% |
| 2004 | +8.1% | +10.9% | +4.3% |
| 2005 | +4.3% | +4.9% | +2.4% |
| 2006 | +11.0% | +15.8% | +4.3% |
| 2007 | +6.6% | +5.5% | +7.0% |
| 2008 | −22.1% | −37.0% | +5.7% |
| 2009 | +17.8% | +26.5% | +5.9% |
| 2010 | +11.6% | +15.1% | +6.5% |
| 2011 | +4.4% | +2.1% | +7.8% |
| 2012 | +11.4% | +16.0% | +4.2% |
| 2013 | +16.5% | +32.4% | −2.0% |
| 2014 | +10.0% | +13.7% | +6.0% |
| 2015 | +1.4% | +1.4% | +0.5% |
| 2016 | +8.2% | +12.0% | +2.6% |
| 2017 | +13.5% | +21.8% | +3.5% |
| 2018 | −2.3% | −4.4% | +0.0% |
| 2019 | +22.1% | +31.5% | +8.7% |
| 2020 | +14.0% | +18.4% | +7.5% |
| 2021 | +16.2% | +28.7% | −1.5% |
| 2022 | −16.1% | −18.1% | −13.0% |
| 2023 | +17.7% | +26.3% | +5.5% |
| 2024 est. | +17.5% | +25.0% est. | +4.5% est. |
Source: NYU Stern: Historical Returns on Stocks, Bonds and Bills. Last verified: September 2026.
Frequently asked questions
Is 60/40 the right allocation for everyone?
The 60/40 portfolio is a conventional "balanced" allocation that works well as a starting point for moderate-risk investors with 10-20 year time horizons, but is not universally appropriate. Those who may benefit from less than 60% equity: investors within 5-10 years of retirement (less time to recover from stock crashes), investors who panic and sell during downturns (a 100% equity portfolio they abandon is worse than a 60/40 they hold), risk-averse investors with shorter time horizons. Those who may benefit from more than 60% equity: investors with very long time horizons (20-40 years), high tolerance for interim volatility, or inflation-hedging goals. Age-based rules (e.g., "100 minus your age" in equities) are heuristics, not prescriptions -- individual circumstances matter more than rules.
How do you rebalance a 60/40 portfolio?
Rebalancing a 60/40 portfolio means periodically buying the underperforming asset class and selling the outperforming one to restore the target allocation. If stocks rise to 70% of the portfolio, sell enough stocks to buy bonds back to 40%. Rebalancing frequency: calendar-based (annually or semi-annually), threshold-based (when allocation drifts more than 5% from target), or combination. Academic research suggests threshold-based rebalancing produces slightly better risk-adjusted returns than calendar rebalancing. Tax efficiency: in taxable accounts, rebalance primarily by directing new contributions to the underweighted asset; avoid triggering capital gains by selling appreciated positions unless the drift is large.
What are alternatives to the traditional 60/40?
Common 60/40 modifications: (1) "All Weather" / risk parity (equal risk from stocks, bonds, gold, commodities -- popularized by Ray Dalio); (2) 60/20/20 (adding 20% alternatives like REITs, commodities, or hedge funds); (3) target-date funds (start aggressive, glide toward bonds as retirement approaches); (4) dividend-focused (high-dividend stocks instead of growth stocks in the equity portion); (5) factor-tilted (adding small-cap value, momentum, or quality tilts to the equity portion). The core insight of 60/40 -- combining growth assets (stocks) with defensive assets (bonds) -- is sound; the specific 60/40 ratio and traditional U.S. stock/U.S. bond composition can be adjusted for individual circumstances and changing market conditions.