Is the 60/40 portfolio dead? BlackRock CEO Larry Fink thinks so — here’s what that means for you and your investments

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In his most recent letter to investors, BlackRock CEO Larry Fink discussed the company’s latest investment strategies and where he envisions the future of investing heading.

One of the most significant developments came in his prediction around portfolio splits, noting that “the classic 60/40 portfolio may no longer fully represent true diversification.”

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He believes there is a better standard portfolio coming soon — the 50/30/20 split high-income investors already prioritize, which includes “stocks, bonds, and private assets like real estate, infrastructure, and private credit.”

Fink says BlackRock’s current goal is to bring private asset investments to the masses, freeing these investments from the gatekeeping that has allowed only the wealthiest access.

“Assets that will define the future — data centers, ports, power grids, the world’s fastest-growing private companies — aren’t available to most investors,” Fink wrote. “They’re in private markets, locked behind high walls, with gates that open only for the wealthiest or largest market participants.”

Recently, BlackRock has acquired Global Infrastructure Partners, Preqin and HPS Investment Partners, a strategy meant to increase the average investor’s access to the traditionally out-of-reach private market — just as they did for ETFs on acquiring iShares.

“Private markets don’t have to be as risky. Or opaque. Or out of reach. Not if the investment industry is willing to innovate,” Fink continued.

BlackRock’s recent acquisitions underscore Fink’s advice against the 60/40 stock-bond portfolio split. The 50/30/20 split means 20% of a person’s investments are in private assets, which could be good for BlackRock’s business as they move in this new private asset-focused direction.

What does this mean for you?

If the democratization of assets previously reserved for the wealthy and a 50/30/20 split sounds appealing to you, there are options that allow you to increase your investment in private assets like real estate right away.

You can tap into the private real estate market by investing in shares of vacation homes or rental properties through Arrived.

Backed by world-class investors like Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, meaning you could earn passive income from real estate without the hassle of being a landlord.

To get started, simply browse through their vetted properties to find potential investments that appeal to you. Once you find your dream investment property, you can start investing with as little as $100.

But as alternative assets become increasingly accessible, there are also ways to put more of your money into this sector. Accredited investors could consider commercial real estate to further diversify their portfolios.

For years, direct access to this $22.5 trillion commercial real estate sector has been limited to a select group of elite investors, but First National Realty Partners (FNRP) has changed that.

FNRP allows accredited investors to diversify their portfolio through grocery-anchored commercial properties, minus the stress of being a commercial landlord.

With a minimum investment of $50,000, you can own a share of properties leased by commercial brands like Whole Foods, Kroger and Walmart and other grocers serving the local community.

Just answer a few quick questions about your investment preferences to start browsing their complete list of available properties today.

Gold is another private investment that has become increasingly popular over the past few months, reaching an all-time high of $3,534 on August 8.

If you’re interested in investing in gold, you can open a gold IRA with the help of Thor Metals.

Gold IRAs allow investors to hold physical gold and gold-related assets within their retirement account, combining the tax advantages of an IRA with the safety of gold. This makes it an attractive option for anyone looking to hedge their retirement funds against economic uncertainties.

Thor Metals offers a free information guide with details on how to get up to $20,000 in free metals on qualifying purchases.

Read more: Do you own rental properties in the US? These 6 hacks can help you boost your income and lower your tax burden

Why 60/40 could still be ideal for many

Some advisors are not as comfortable as Fink is with the 50/30/20 split for the average investor.

Amy Arnott, portfolio strategist at Morningstar, told CNBC that a 20% allocation in private assets is still considered aggressive.

“If you want to keep things very simple, the 60/40 portfolio or a target date fund is a great starting point,” Arnott said.

She noted that the total value of private assets globally is only “about $14.3 trillion, while the public markets are worth about $247 trillion,” which means private assets account for just 6% of the market — not 20%.

If you’re not sure what split you should be investing in, you might want to speak with a financial advisor to help give you peace of mind.

Advisor.com can help match you with an advisor to find the right portfolio mix for you. Since their advisors are legally obligated to act in your best interest, you know your money is in good hands.

Just answer a few quick questions about yourself, and Advisor.com will match you with a vetted financial advisor who can walk you through your portfolio options.

From here, you can book a free, no-obligation call today to find the best advisor for you.

If your household income is above $300,000, you might also consider a wealth management team like Range to help you figure out all the possible options.

Range’s all-in-one wealth management platform offers modern investing advice — with no hidden fees.

Traditional advisors typically charge 0.5-2% AUM fees, but Range’s flat-fee pricing with 0% AUM fees offers comprehensive plans at a fraction of the cost of traditional advisors.

Range’s clients receive 24/7 expert advice and personalized strategies, allowing for complete portfolio customization alongside full wealth management — including complex tax management, equity compensation and estate planning.

Book a free demo with the Range team today to find out more.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.