Investors in a 60/40 balanced portfolio saw declines on both sides as the S&P 500 dropped 0.7% while the 10-year Treasury yield surpassed 5.1%, its highest level since 2007. The iShares Core 60/40 Balanced Allocation ETF (AOR) fell 1% during that session. Unlike 2022, when the same fund tumbled roughly 17%, experts say the current environment is dramatically different as today’s higher starting yields provide some protection against falling prices. They recommend investors focus on investment-grade bonds with short to intermediate maturities, with the 5- to 6-year range identified as the sweet spot for long-term investors.
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