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American Investors Are Ditching the Classic 60/40 Portfolio for Crypto and Alternatives

MarketDash Editorial Team
23 days ago
Two-thirds of American investors now look beyond traditional stocks and bonds, embracing crypto, private equity, and alternative assets. A new survey reveals why the 60/40 portfolio model is losing favor as investors seek diversification in today's volatile market environment.

The 60/40 portfolio might not be dead, but it's definitely getting a reputation as your grandfather's investment strategy. American investors are increasingly looking beyond the traditional stocks-and-bonds playbook, with two-thirds now incorporating alternative assets into their portfolios, according to Charles Schwab (SCHW).

This represents a fundamental shift in how people think about building wealth. While stocks, mutual funds, and bonds still form the core of most portfolios, a substantial 42% of American investors now consider the classic 60/40 split—60% stocks, 40% bonds—to be outdated advice from a bygone era.

"It's never been a better time to be a retail investor," Jonathan Craig, head of retail investing at Charles Schwab, said in a statement.

The Trading Paradox: More Active, Yet More Patient

The survey, released in October, reveals a fascinating contradiction in modern investing behavior. On one hand, 52% of investors said investing now involves more short-term risk-taking than in the past, with trading consuming a larger portion of their time and attention. After getting started, 43% of investors ramped up their trading activity, driven by three main factors:

  • Better platforms and tools (51%)
  • The desire to capitalize on market opportunities (51%)
  • Greater experience and confidence (48%)

But here's where it gets interesting. Despite all this increased trading activity, about 6 out of 10 investors said today's market environment actually requires more of a long-term approach than before. Even more striking: 68% said they're more patient investors now than when they first started.

This patience extends across generations, including millennials and Gen Z investors who are often stereotyped as attention-deficit day traders chasing meme stocks. The survey found that 62% of Gen Z investors and 72% of millennials have actually grown more patient over time.

"Even in a world that can feel driven by instant gratification, it's encouraging to see so many investors recognize the importance of taking a long-term perspective and steadily building wealth," Craig said.

Why the 60/40 Model Is Losing Its Shine

So what's driving this exodus from the traditional portfolio model? The list of reasons keeps growing: low bond yields, persistent market volatility, shifting correlations between stocks and bonds, interest-rate pressures, and the simple fact that people are living longer and need their money to last decades.

Gregory Poapst, managing partner at Fundviews Capital, wrote on fund administrator Essential Fund Services International's site that alternative investments are becoming central to modern portfolios. He argued that alternative assets offer return streams that are less correlated to public markets. They also create opportunities to capture illiquidity and complexity premiums, along with specialized strategies that can deliver strong risk-adjusted outcomes.

Alternatives "can be a core driver of portfolio resilience," Poapst wrote. "Whether through private equity, private credit, infrastructure, real estate or niche funds, these exposures can smooth volatility, unlock differentiated returns and align portfolios with structural trends."

Ric Edelman, former head of Edelman Financial Engines, told CNBC in May that the classic 60/40 approach simply can't support modern life expectancies. When you might need your portfolio to last 30 or 40 years in retirement, the old rules start to break down.

The Younger Generation Is Leading the Charge

Younger wealthy investors are particularly skeptical of traditional approaches. According to the 2024 Bank of America Private Bank Study of Wealthy Americans, nearly 75% of wealthy investors under 43 don't believe a traditional stock and bond portfolio can deliver above-average returns. Perhaps more telling: 93% of them plan to allocate more of their portfolio to alternatives.

That's not exactly a vote of confidence in the old playbook.

What This Means for Your Portfolio

The Schwab survey isn't necessarily a signal to blow up your portfolio overnight and go all-in on crypto and private equity. But it might be worth asking yourself whether your investment strategy was built for today's market environment or yesterday's.

Craig emphasized that today's investors have unprecedented access to tools, platforms, educational resources, and a wider range of investment products than ever before. "With greater access to high-quality platforms and tools, comprehensive educational resources, a wider range of products than ever before, and 24/7 professional support, investors can diversify and personalize their portfolios to match their goals," he said.

Rob Williams, head of wealth management research at the Schwab Center for Financial Research, noted that this expansion of options makes professional guidance more valuable, not less. "With more choices and strategies than ever — from crypto to alternatives to more frequent trading — advice can help investors navigate the range of possibilities, make informed decisions and shape portfolios that reflect their goals and appetite for risk," Williams said.

The bottom line? The investment landscape has fundamentally changed. Whether the 60/40 portfolio deserves a place in your strategy depends on your specific goals, timeline, and risk tolerance. But pretending we're still in the same market environment that made that split the gold standard decades ago probably isn't doing you any favors.

Back to News

American Investors Are Ditching the Classic 60/40 Portfolio for Crypto and Alternatives

MarketDash Editorial Team
23 days ago
Two-thirds of American investors now look beyond traditional stocks and bonds, embracing crypto, private equity, and alternative assets. A new survey reveals why the 60/40 portfolio model is losing favor as investors seek diversification in today's volatile market environment.

The 60/40 portfolio might not be dead, but it's definitely getting a reputation as your grandfather's investment strategy. American investors are increasingly looking beyond the traditional stocks-and-bonds playbook, with two-thirds now incorporating alternative assets into their portfolios, according to Charles Schwab (SCHW).

This represents a fundamental shift in how people think about building wealth. While stocks, mutual funds, and bonds still form the core of most portfolios, a substantial 42% of American investors now consider the classic 60/40 split—60% stocks, 40% bonds—to be outdated advice from a bygone era.

"It's never been a better time to be a retail investor," Jonathan Craig, head of retail investing at Charles Schwab, said in a statement.

The Trading Paradox: More Active, Yet More Patient

The survey, released in October, reveals a fascinating contradiction in modern investing behavior. On one hand, 52% of investors said investing now involves more short-term risk-taking than in the past, with trading consuming a larger portion of their time and attention. After getting started, 43% of investors ramped up their trading activity, driven by three main factors:

  • Better platforms and tools (51%)
  • The desire to capitalize on market opportunities (51%)
  • Greater experience and confidence (48%)

But here's where it gets interesting. Despite all this increased trading activity, about 6 out of 10 investors said today's market environment actually requires more of a long-term approach than before. Even more striking: 68% said they're more patient investors now than when they first started.

This patience extends across generations, including millennials and Gen Z investors who are often stereotyped as attention-deficit day traders chasing meme stocks. The survey found that 62% of Gen Z investors and 72% of millennials have actually grown more patient over time.

"Even in a world that can feel driven by instant gratification, it's encouraging to see so many investors recognize the importance of taking a long-term perspective and steadily building wealth," Craig said.

Why the 60/40 Model Is Losing Its Shine

So what's driving this exodus from the traditional portfolio model? The list of reasons keeps growing: low bond yields, persistent market volatility, shifting correlations between stocks and bonds, interest-rate pressures, and the simple fact that people are living longer and need their money to last decades.

Gregory Poapst, managing partner at Fundviews Capital, wrote on fund administrator Essential Fund Services International's site that alternative investments are becoming central to modern portfolios. He argued that alternative assets offer return streams that are less correlated to public markets. They also create opportunities to capture illiquidity and complexity premiums, along with specialized strategies that can deliver strong risk-adjusted outcomes.

Alternatives "can be a core driver of portfolio resilience," Poapst wrote. "Whether through private equity, private credit, infrastructure, real estate or niche funds, these exposures can smooth volatility, unlock differentiated returns and align portfolios with structural trends."

Ric Edelman, former head of Edelman Financial Engines, told CNBC in May that the classic 60/40 approach simply can't support modern life expectancies. When you might need your portfolio to last 30 or 40 years in retirement, the old rules start to break down.

The Younger Generation Is Leading the Charge

Younger wealthy investors are particularly skeptical of traditional approaches. According to the 2024 Bank of America Private Bank Study of Wealthy Americans, nearly 75% of wealthy investors under 43 don't believe a traditional stock and bond portfolio can deliver above-average returns. Perhaps more telling: 93% of them plan to allocate more of their portfolio to alternatives.

That's not exactly a vote of confidence in the old playbook.

What This Means for Your Portfolio

The Schwab survey isn't necessarily a signal to blow up your portfolio overnight and go all-in on crypto and private equity. But it might be worth asking yourself whether your investment strategy was built for today's market environment or yesterday's.

Craig emphasized that today's investors have unprecedented access to tools, platforms, educational resources, and a wider range of investment products than ever before. "With greater access to high-quality platforms and tools, comprehensive educational resources, a wider range of products than ever before, and 24/7 professional support, investors can diversify and personalize their portfolios to match their goals," he said.

Rob Williams, head of wealth management research at the Schwab Center for Financial Research, noted that this expansion of options makes professional guidance more valuable, not less. "With more choices and strategies than ever — from crypto to alternatives to more frequent trading — advice can help investors navigate the range of possibilities, make informed decisions and shape portfolios that reflect their goals and appetite for risk," Williams said.

The bottom line? The investment landscape has fundamentally changed. Whether the 60/40 portfolio deserves a place in your strategy depends on your specific goals, timeline, and risk tolerance. But pretending we're still in the same market environment that made that split the gold standard decades ago probably isn't doing you any favors.