The article argues that a simple 60/40 stock-bond portfolio with periodic rebalancing can recover faster from crashes than the S&P 500 alone. Citing J.P. Morgan data, it says the 60/40 mix recovered from drawdowns of 20% or more in 11 months on average since 1988, versus 24 months for the S&P 500 with dividends reinvested. Since 1989, the 60/40 portfolio produced positive returns in 99% of five-year periods and 100% of 10-year periods, compared with 87% and 93% for the S&P 500. Rebalancing forces investors to buy stocks as they fall, and bonds posted positive returns in 21 of the last 25 years the S&P 500 declined. However, the 60/40 portfolio has returned an annualized 9.4% since 1950 versus 11.7% for the S&P 500, which the author describes as the price of downside protection.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Related news
- Can the Permanent Portfolio strategy protect your wealth?
Harry Browne's Permanent Portfolio, developed in the 1980s, splits holdings equally among stocks, long-dated bonds, gold and cash, rebalanced annually to aim for returns in all market conditions. A JustETF back-test using European ETFs from January 2007 to June 2026 shows a cumulative return of 234%, versus 434% for a 100% equity portfolio and 279% for a portfolio of 60% stocks and 40% bonds, but with volatility of just 6.3% compared with 8.6% and 13.5%. Its drawdown barely touched 5% in 2008, when equity markets lost nearly 50%, while its worst drawdown in two decades, just over 10%, came in 2022 as inflation surged and long bonds sold off. A UK version returned a compound annual growth rate of 5.8%, with long gilts down about 48% offset by a 132% rise in gold, and a weighted average cost of 0.17%.
- This Warren Buffett Strategy Is Key to Surviving a Stock Market Crash, and It Requires Next to No Effort On Your Part
The S&P 500 is rising for a fourth straight year and could gain more than 100% over this period, which may lead some investors to worry that high valuations could bring a crash. The article explains that crashes are part of the market cycle and typically occur when an index loses 20% or more in less than a week, often triggered by fear that prompts investors to sell. It recommends holding quality stocks with competitive advantages and earnings strength through downturns rather than selling, and highlights that Warren Buffett bought stocks for his personal account during the 2008 financial crisis. Buffett wrote in 2008 that the market would likely move higher well before sentiment or the economy turned up.
- If a Stock Market Crash Is Coming , These 5 Stocks Have a History of Holding Up
The article argues that if a market crash comes, five stocks (Costco, TJX, Coca-Cola, Procter & Gamble and Walmart) have held up through the 2008, 2018 and 2022 downturns, and all pay dividends. Coca-Cola, P&G and Walmart are Dividend Kings that have raised dividends for at least 50 consecutive years, with P&G at 70 years. Costco's sales growth reached 13% year over year in September, and its stock gained 49% the year after a downturn, while TJX sells brand-name goods at 20% to 60% off retail, with fiscal Q2 sales up 4% and EPS up 24%. Coca-Cola is up 40% this year, with Q2 sales up 7% and EPS up 16%. Walmart operates almost 11,000 stores, its e-commerce sales rose 23% and total sales grew 5.9%.
- If a Stock Market Crash Is Coming , These 5 Stocks Have a History of Holding Up
The article names five stocks it says have held up in past market crashes in 2008, 2018 and 2022: Costco, TJX, Coca-Cola, Procter & Gamble and Walmart, all of which pay dividends. Coca-Cola, Procter & Gamble and Walmart are Dividend Kings, having raised dividends for at least 50 consecutive years. Costco's sales grew 13% year over year in September, and its stock rose 49% the year after underperforming the S&P 500. TJX gained 81% in 2009 after barely beating the market in 2008. Coca-Cola is up 40% this year, with latest-quarter sales up 7% and EPS up 16%, while Walmart's e-commerce sales rose 23%.
- If a Stock Market Crash Is Coming, These 5 Stocks Have a History of Holding Up
The article names five stocks, Costco, TJX Companies, Coca-Cola, Procter & Gamble and Walmart, that have held up through past market crashes, including in 2008, 2018 and 2022. All five pay dividends, and Coca-Cola, Procter & Gamble and Walmart are Dividend Kings, having raised dividends for at least 50 consecutive years. Costco's sales grew 13% year over year in September, and its stock gained 49% the year after a downturn in which it lagged the index. TJX sells off-price goods at 20% to 60% below retail across 5,200 stores, with EPS up 24% in its fiscal second quarter, while Coca-Cola is up 40% this year. Walmart's e-commerce sales rose 23% in its fiscal second quarter ended July 31.
- If a Stock Market Crash Is Coming , History Says These 3 ETFs Are the Smartest Buys
The article argues the stock market's run looks precarious, noting Warren Buffett's favourite valuation metric is well above the level where he warned investors were “playing with fire.” It says history points to three ETFs as among the smartest choices if a crash comes. The Schwab U.S. Dividend Equity ETF (SCHD) yields 3.3%, pays regular quarterly distributions, and has roughly 41% of holdings in consumer staples and healthcare. The State Street Health Care Select Sector SPDR Fund (XLV) holds 60 large healthcare stocks, beat the S&P 500 over the last 12 months, and recovered faster than the market after the dot-com and 2008 downturns. The State Street SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) holds short-term Treasuries, pays a yield above 4%, and aims to protect capital, though it won't deliver big gains in a crash.
Related markets
Latest news
- TRX Gold to Present at Red Cloud's Fall Mining Showcase 2026
TRX Gold will present at Red Cloud's Fall Mining Showcase 2026, an in-person conference at the Omni King Edward Hotel in Toronto on October 28 and 29, 2026. Stephen Mullowney is scheduled to present on Thursday, October 29, 2026 at 12:00 PM Eastern. The release describes the company as a gold producer advancing the Buckreef Gold Project in Tanzania, which includes an established open pit and a 2,000 tonnes per day plant. The May 2025 PEA outlines average annual gold production of 62,000 oz over 17.6 years.
- Tesla Stock vs. the S&P 500: Which Investment Wins Through 2030?
The article argues Tesla trades at roughly 203 times this year's expected earnings and 13 times expected sales, a valuation that looks very expensive given gross margin pressure and a slower-than-expected robotaxi rollout. The flying Roadster, slated for production in 2028, is unlikely to make a meaningful sales or earnings contribution before 2030. The author thinks a Tesla-SpaceX merger by the end of the decade, likely an all-stock deal, is more likely than not and would be a key factor in how Tesla stock performs against the S&P 500 through 2030.
- SpaceX surprises Wall Street with Oct. 20 earnings date — here's why
SpaceX (SPCX) will release earnings on Oct. 20 after the market close, a surprise since earnings dates are usually shared weeks in advance. Evercore ISI analyst Kutgun Maral says possible reasons include putting updated financials on record before new financing or getting ahead of major lock-up releases, though scheduling is also possible. Reuters reported SpaceX is seeking $40 billion in financing to buy advanced Nvidia AI chips, including about $10 billion in bank loans and $30 billion in investment-grade debt, with Apollo expected to lead. The lock-up schedule includes 1.30 billion shares two days after earnings, 329 million on 10/24, and a remaining 857 million tranche of the 180-day group.
- AEP Partners with Amazon and X-energy to Explore Advanced Nuclear Energy in Indiana
American Electric Power (AEP) has announced a joint development agreement with X-energy to evaluate the feasibility of a 960-megawatt advanced nuclear project at a former coal plant site in Sullivan County, Indiana. Amazon is supporting development through a funding agreement. If the project reaches a final investment decision and is built, Amazon intends to buy the power under a long-term contract covering the facility's costs and operations. The initial project would include 12 Xe-100 units of 80 MW each, and the companies say it could create jobs, expand the local tax base and strengthen the grid for more than 60 years. AEP says the agreements include the financial safeguards it considers essential for any nuclear project to move forward.
- Talamore Marks One Year at Coffee with Major Advances Toward a 2027 Construction Decision
Talamore Mining marks one year since closing its acquisition of the Coffee Gold Project in Yukon, Canada, from Newmont Corporation on October 17, 2025. The company has assembled a financing package of up to C$688 million, including a C$149.5 million equity offering, a C$450 million secured project debt facility and up to C$88 million from a warrant early-exercise program. A primary road permit received in August 2026 allows completion of the 214-kilometre Northern Access Route from Dawson City. The February 2026 Preliminary Economic Assessment outlined a 13-year open-pit heap leach mine with an after-tax NPV (5%) of US$2.3 billion and an after-tax IRR of 47.8%. G Mining Services is completing the Feasibility Study, expected in Q1 2027, ahead of a construction decision targeted for the first half of 2027.
- Tiger Gold Extends Mineralization to the South at Ceibal, Drilling 268 m @ 0.5 g/t Au from Surface
Tiger Gold reported assay results from hole CEDDH-023 at its Ceibal target within the Quinchía Gold Project in Colombia. The hole intersected 268 metres grading 0.5 g/t Au from surface, extending mineralization south into a previously untested part of the corridor. Mineralization remains open to the west and southwest, where additional holes are testing for extension, and assays from Ceibal and Tesorito are pending. The drilling is intended to support a maiden Mineral Resource estimate, targeted for near the end of Q1 2027.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.