“The old order is not coming back. We should not mourn it. Nostalgia is not a strategy.”
When Prime Minister Mark Carney delivered those words at Davos last week, he was talking about geopolitics. But he could just as easily have been talking about your portfolio.
For decades, the investing playbook was simple. Buy stocks for growth. Buy bonds for safety. Mix them 60/40 and rebalance occasionally. It worked beautifully—for a world that no longer exists.
That world had falling interest rates. Globalization. Low inflation. Central banks that could rescue markets with a rate cut. Bonds that zigged when stocks zagged.
That world is gone.
The Numbers Don’t Lie
In 2022, the traditional 60/40 portfolio had its worst year in nearly a century. Stocks fell. Bonds fell harder. The “balanced” portfolio that was supposed to protect you did nothing of the sort.
This wasn’t a fluke. It was a signal.
When Bank of America’s chief investment strategist Michael Hartnett describes the early 2020s as an era of “bond-market humiliation,” he’s not being dramatic. The iShares 20+ Year Treasury Bond ETF—the benchmark for long-duration bonds—dropped 31% in 2022 alone. From its 2020 peak to late 2023, the drawdown hit nearly 48%.
Bonds weren’t supposed to do that. They were supposed to be safe.
Why Nostalgia Keeps Investors Stuck
Here’s the uncomfortable truth: most investment advice is still built for the old world.
Financial advisors recommend the same balanced portfolios they recommended a decade ago. The models haven’t changed. The assumptions haven’t changed. The allocations haven’t changed.
But the world has.
Inflation is stickier than expected. Interest rates are higher for longer. Geopolitical risk is rising. Supply chains are being redrawn. The rules that governed markets for forty years are being rewritten in real time.
Clinging to the old playbook isn’t prudent. It’s nostalgic. And nostalgia, as Carney reminded us, is not a strategy.
What the Institutions Already Know
Canada’s largest pension funds figured this out years ago. CPP, Ontario Teachers’, AIMCo — they don’t run 60/40 portfolios. They allocate up to 40-50% of their assets to alternatives: private equity, infrastructure, private credit, real estate.
Why? These assets behave differently from stocks and bonds. They generate income that isn’t tied to daily market swings. They offer diversification that works when you need it most.
For decades, these investments were off-limits to individual investors. That’s changing. The same pension-grade strategies that protected institutional portfolios are now accessible to professionals and business owners who’ve built real wealth.
The Choice
You can keep doing what you’ve always done. Stick with the 60/40 portfolio. Hope that bonds start behaving the way they used to. Wait for the old order to return.
Or you can accept that it’s not coming back—and build a portfolio for the world we actually live in.
Nostalgia is not a strategy. Adaptation is.
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Shamez Kassam, CFA, MBA, is the founder of Mount Columbia Private Wealth and author of “Your Money’s Worth: The Essential Guide to Financial Advice for Canadians.” View his profile on LinkedIn