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Remember back in 2022 when headlines declared the 60/40 portfolio dead? (Not our headlines, to be clear.) The media loves declaring things “over,” and they’re often wrong – happily in the case of diversification, not so much when it comes to trends we’d all rather leave behind.

Admittedly, 2022 was rough. Stocks fell. Bonds fell. U.S., international – red across the board. Diversification seemed like it had just ghosted investors.

But here we are in 2025, and it’s undeniable – diversification still works exactly as it should. As we’ve always insisted, 2022 was an outlier, not a new normal. Let’s review the replay.

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WHAT’S THE BIG DEAL ABOUT DIVERSIFICATION?

Diversification means spreading your money across different types of assets – stocks, bonds, international equities, for example. The idea? When one part of your portfolio is having a bad day, another part might be holding steady or even thriving.

It doesn’t guarantee profits, but it helps manage risk so you’re not betting everything on one horse.

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2025: DIVERSIFICATION NAILS IT OVER THE PLATE

STOCKS

U.S. stocks – represented by the headline S&P 500– were up about 15% through the end of the third quarter. That’s a healthy premium over the long-term average.

BONDS

Here’s diversification on full display: When stocks had a rough time earlier this year (thanks to tariff drama), long-term Treasury bonds stepped up with gains of over 4% in just two months. They’re up 5.6% through the third quarter. Even better – they’ve been providing a healthy yield over 4% as well.

That can be a benefit of holding bonds when stocks are down. They usually have a negative correlation with stock returns, meaning they move in opposite directions.

INTERNATIONAL STOCKS

International stocks had been wandering in the wilderness for a few years, but in 2025, they had a banner year too. Developed markets (MSCI EAFE) climbed over 25% through the third quarter, and emerging markets soared almost 27%. Why? A weaker dollar and global growth trends, plus some ironic boosts from tariffs and shifting geopolitical dynamics that are encouraging investment in places other than the U.S.

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WHY DIVERSIFICATION SOMETIMES FEELS LIKE A BUZZKILL

Here’s the truth: Diversification means you’ll never have the bragging rights that come with being all in on the year’s best-performing asset class. But, no matter what it is, you’ll ideally own some of it! And the goal of diversification is that you won’t be stuck holding a bagful of the worst asset class, either. This balanced approach is our best strategy to helping you reach your long-term financial goals through the ups and downs that we know will come in the markets.

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LONG LIVE DIVERSIFICATION

Diversification isn’t dead. It never was.

So next time you hear someone proclaim that the 60/40 portfolio is so over, smile and remember: Rumors of its death have been greatly exaggerated.