Following the recent election, U.S. stocks experienced a notable surge, reaching new all-time highs. The Dow and S&P 500 saw their best weekly performance of the year, both climbing around 4.7% for the week, marking their strongest week since November 2023, as reported by Medora Lee.

While Stocks Increased, Bond Markets Declined

A writer from the New York Times recently highlighted a difference in sentiment between stock and bond investors—stock investors tend to be optimistic, while those in bonds are more cautious.

As stock prices soared following Donald Trump’s election victory, the bond market took a downturn. On Wednesday, the yield on 10-year Treasury bonds reached 4.479%, the highest in four months. An increase in bond yields indicates a decrease in bond prices.

While stock traders celebrated, bond traders expressed concerns regarding Trump’s economic policies.

Is the 60/40 Rule Still Relevant?

Here’s some further discussion on stocks versus bonds.

The 60/40 rule is a classic investing guideline suggesting that investors should divide their portfolio with 60% in stocks and 40% in bonds.

While stocks may offer high returns, they can be quite unstable, whereas bonds provide stability during downturns in the stock market.

This rule has been a staple in personal finance, but recently, many in the investment community have begun to move away from it.

About The Daily Money

Every weekday, The Daily Money provides top-notch consumer and financial news from YSL News, distilling complex issues into concise updates and explaining how various events, such as Fed rate changes and bankruptcies, can affect you.