Not Your Dad’s Portfolio

Beyond The Workforce

Issue 23

By David Thomas Graves

The 60/40 portfolio is dead

No headlines. No breaking news alerts. No CNBC anchor wiping away a tear. Just a quiet death in the corner while Wall Street drags the corpse around like Weekend at Bernie’s. And most Americans don’t even know it happened.

For decades, the formula was gospel: 60% stocks, 40% bonds. Neat, balanced, “responsible.” Your dad believed in it. Your granddad believed in it. Maybe you still believe in it because it sounds safe,  the financial version of eat your vegetables.

But here’s the truth: the world that made 60/40 work is gone. That formula was built on post-war America, stable dollar, predictable inflation, sane interest rates, and a stock market that actually mirrored growth. You don’t live in that world anymore. You live in a casino economy of negative yields, speculative mania, and politicians pulling levers on the money supply like kids at an arcade.

And yet, advisors still peddle 60/40 like it’s timeless wisdom. Why? Because it’s simple. Because it’s easy to sell. Because Wall Street makes money convincing you that tradition equals safety. It’s not wisdom. It’s marketing.

The 60/40 didn’t collapse by accident. It collapsed because its foundation was torched by policy, greed, and financial engineering. Nobody told the workers. So here we are, clinging to a ghost. Pretending balance still means safety. Pretending this portfolio has anything to do with your reality. It doesn’t. If you keep believing in it, the only thing that will be balanced is how evenly the system separates you from your money.


The Origin Story Nobody Told You

The 60/40 portfolio wasn’t handed down from Moses. It didn’t appear in the Constitution. It was stitched together in the 1950s and ’60s by academics like Harry Markowitz, who came up with “modern portfolio theory.” The pitch: mix a little risk (stocks) with a little safety (bonds) and you land on the “efficient frontier” of returns. Sounds like science. It was sales.

Here’s the part they don’t tell you: this was never designed for the average worker. It was built for institutions, billion-dollar pension funds, endowments, and wealthy investors. They could absorb volatility. They could wait out recessions. You? You’re trying to retire with $300,000 in a 401(k). For you, volatility isn’t an equation. It’s a cliff.

The reason 60/40 became gospel wasn’t math. It was marketing. In the 1980s, as pensions gave way to 401(k)s, advisors needed a story they could sell across the dinner table. “Put 60% in stocks, 40% in bonds, and you’ll be fine.” Clean. Respectable. Completely divorced from reality.

So the myth was born: a one-size-fits-all “solution” for a workforce stripped of pensions. Workers clung to it because there was nothing else to cling to, never realizing the raft had holes built into it on purpose.


Who Really Profited

Here’s the thing, the winners of 60/40 weren’t workers. They were brokers, fund managers, and financial institutions skimming fees every step of the way.

Workers were told to “set it and forget it.” Wall Street never forgot. They built index funds, bond ETFs, and target-date funds, all riding the 60/40 skeleton. Every buy, every rebalance, every shift meant another fee. Workers got the scraps. Wall Street feasted.

And it worked because there was no alternative. You couldn’t buy Bitcoin in 1985. You couldn’t stash gold bars in a 401(k). You couldn’t question the system without sounding reckless. The 60/40 wasn’t just a strategy,  it was the only socially acceptable way to “invest responsibly.” Question it and you were branded a fool.

So Wall Street built a monopoly of thought. Workers got the illusion of safety. The industry got rivers of fees.


Bonds: The Safety Net That Rotted

Bonds used to be boring. Safe. You loaned Uncle Sam a thousand bucks, he gave you 5% a year. No drama. That’s why your dad loved them.

That world is gone. Bonds today aren’t about protecting savers. They’re about propping up liquidity. They don’t anchor workers. They anchor the machine.

The illusion cracked in March 2020, when the Treasury market, supposedly the safest market in the world, froze. Buyers vanished. Liquidity evaporated. The “risk-free” asset nearly blew up the system. Only a Federal Reserve money firehose kept it alive.

And pensions? They’ve been gutted. Starved of yields, they’ve plunged into hedge funds and speculative bets to patch the hole. Every year the shortfall grows. Every year workers lose a little more security.

Then came the grotesque trick of negative yields. In Europe and Japan, workers literally paid governments for the privilege of lending them money. Imagine locking up $1,000 for ten years and getting $950 back. That’s what passed as “safety.”

Bonds aren’t your safety net anymore. They’re raw material in a liquidity machine that bleeds your savings for fuel.


Stocks: The World’s Most Expensive Arcade

If bonds betrayed you quietly, stocks betrayed you loud.

Once, buying stock meant owning part of a company. Growth meant dividends. Dividends meant progress. The market mirrored the economy.

Not anymore. Now stocks are arcade tokens in a rigged machine. Companies borrow cheap money not to innovate, but to buy their own shares. Executives cash out. Workers get nothing. High-frequency traders scalp pennies at the speed of light. And when retail traders pushed back in 2021, brokers literally shut off the buy button. Free market? Nope. Rigged casino.

And the worst scam of all? Diversification. You think your index fund “owns the market.” In reality, it owns seven companies. Apple, Microsoft, Amazon, Nvidia, Alphabet, Meta, and Tesla. Nearly 30% of the S&P 500 is just those names. Strip them out, and the index limps.

You don’t own 500 companies. You own seven giants and a graveyard of benchwarmers. Every dollar you shovel into your 401(k) fattens the giants and leaves you with table scraps.


The Big Three

Vanguard, BlackRock, State Street. The so-called “Big Three.” They control over $20 trillion in assets, not because they’re geniuses. Because your retirement contributions are locked in their custody by default.

When you buy an index fund, you don’t own the shares. They do. They vote the proxies. They decide the boards. They set the pay packages. You supply the capital; they pull the strings.

Your dad thought buying stocks meant a seat at the table. You think index funds mean owning the economy. The truth? You’re just renting a line on a balance sheet. The real owners wear suits in BlackRock’s boardroom.


Retirement Accounts: The Handcuffs

Retirement accounts were pitched as liberation: defer taxes, collect the match, retire with dignity. In reality, they’re the perfect handcuffs.

Every paycheck funnels into a narrow set of funds. Those funds are custodied by the same giants who vote your shares and lend them out for profit. Tax rules make escape painful. Early withdrawals are punished. Rollovers just shift you from one warden to another.

On paper, you see a balance. In practice, you have no voice, no vote, no exit. Your savings aren’t yours. They’re liquidity fuel strapped to the machine.


Why 60/40 Won’t Save You

The whole pitch of 60/40 was balance: stocks rise, bonds steady. That world is gone. In 2022, both collapsed, the worst year for 60/40 in modern history. Inflation killed bonds. Higher rates gutted stocks. Workers watched their “balanced” portfolios bleed double digits.

Today, bonds are dead weight. Stocks are casino chips. Retirement accounts funnel you into both. What used to be a see-saw is now a trapdoor.

The model survives not because it works for you, but because it works for the system. Bonds provide collateral. Stocks provide equity. Retirement accounts guarantee inflows. The 60/40 isn’t a strategy. It’s a policy tool dressed up as financial wisdom.


The End of Trust

Every empire runs on trust, until it doesn’t. Workers are waking up. They open their statements and realize a decade of savings vanished. They see record CEO bonuses rubber-stamped with their own proxy votes, votes they never cast. They’re told to “just hold on,” while the math shows they’ve lost years they’ll never get back.

The financial industry built its empire on trust: that markets are fair, that portfolios protect, that patience pays. That story is dead.

Trust is gone. All that’s left is the bill.

© David Thomas Graves 2025

The Funeral Nobody Attended

They didn’t announce it. There was no press release, no panic, no headlines. Just a quiet death in the corner while Wall Street pretended not to notice. The 60/40 portfolio, the so-called “balanced” formula that built the illusion of middle-class security, finally flatlined. And yet, most Americans are still feeding it every paycheck, trusting a strategy that hasn’t worked in twenty years. This isn’t a story about investing. It’s a story about belief, about how a generation of workers was taught to mistake captivity for safety, and how the system still profits from pretending the corpse is breathing.

Listen to the full article on Beyond the Workforce Podcast