Gage Skidmore \/ Wikimedia Commons <\/p>\n
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.<\/p>\n
For decades, the classic 60\/40 portfolio \u2014 60% stocks and 40% bonds \u2014 served as the cornerstone of balanced investing. The idea was simple: When stocks stumbled, bonds would steady the ship.<\/p>\n
But according to economist Peter Schiff, that old formula no longer holds up. Inflation, he warns, has torn apart one side of the traditional mix, leaving investors exposed to painful consequences.<\/p>\n
\u201cBonds are clearly the biggest victims of inflation. If you own bonds, inflation kills you. There is no hedge,\u201d Schiff said in a YouTube video from October 2025 (1).<\/p>\n
But, on Dec. 22, Wells Fargo reported that the yield on 10-year bonds increased 0.03% while 30-year bonds saw a 0.02% uptick (2). This follows the BLS reporting lower inflation rates than expected on Dec. 18, in their first report on the Consumer Price Index since the government shutdown in October and November (3).<\/p>\n
Bonds are particularly vulnerable when price levels rise. Their fixed payments don\u2019t adjust for inflation, meaning investors are repaid in dollars that buy less and less over time.<\/p>\n
Meanwhile, higher inflation often pushes interest rates up \u2014 and as rates rise, the market value of existing bonds falls because new issues offer better yields. That double blow \u2014 shrinking purchasing power and falling prices \u2014 can leave existing bondholders with real losses even as they collect \u201csafe\u201d interest payments.<\/p>\n
That\u2019s a serious concern because bonds remain a core holding in many Americans\u2019 portfolios, especially retirement accounts. For retirees and near-retirees counting on those holdings to preserve purchasing power, inflation can quietly erode wealth \u2014 even when markets appear calm. If inflation spikes again, many Americans could see their portfolios become compromised.<\/p>\n
To address that problem, a major Wall Street firm is giving the traditional 60\/40 mix a modern upgrade.<\/p>\n
Schiff pointed out that Morgan Stanley is leading the rethink. Instead of 60% stocks and 40% bonds, Morgan Stanley chief investment officer Mike Wilson now favors 60% stocks, 20% fixed income and 20% gold.<\/p>\n
\u201cGold is now the anti-fragile asset to own, rather than Treasuries. High-quality equities and gold are the best hedges,\u201d Wilson told Reuters (4).<\/p>\n
Gold has helped investors preserve wealth for thousands of years. It\u2019s a natural inflation hedge \u2014 unlike fiat currencies, it can\u2019t be printed at will by central banks. It\u2019s also considered the ultimate safe haven: not tied to any single country, currency or economy. When markets wobble, or geopolitical tensions flare, investors often rush into gold, driving prices higher.<\/p>\n
That trend is already underway. Gold prices are up 136.15% over the last five years, with much of that growth happening in 2025 (5). Schiff noted that Morgan Stanley\u2019s suggested 20% allocation is \u201cnot chump change\u201d \u2014 calling it \u201ca lot of money coming into gold\u201d (6). He believes it could mark the start of a major shift, as \u201ca huge wave of Wall Street money\u201d flows out of bonds and into gold.<\/p>\n
And Morgan Stanley isn\u2019t alone. Goldman Sachs has become increasingly bullish as well, recently raising its December 2026 gold price target by $600 to $4,900 per ounce, expecting strong ETF inflows and continued central bank buying (7). As of Dec. 22, 2025, the spot price of gold hit a new record high of over $4,450 per ounce (8).<\/p>\n
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)<\/a>\u2019<\/p>\n One method that some people use to invest in gold is a self-directed gold IRA<\/a>.<\/p>\n A gold IRA allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.<\/p>\n If you\u2019re not sure where to start, you can check out some of Moneywise\u2019s top picks for gold IRAs<\/a> to compare your options for free. Just keep in mind that gold is often best used as one part of a well-diversified portfolio.<\/p>\n Wilson also highlighted high-quality equities \u2014 alongside gold \u2014 as \u201cthe best hedges\u201d against inflation. Schiff expanded on that point, saying \u201cstocks can also be viewed as an inflation hedge, although not all stocks are the same in that respect.\u201d<\/p>\n Stocks can serve as a hedge against inflation when companies are able to raise prices to offset rising costs, allowing their revenues and earnings to grow alongside inflation.<\/p>\n Over time, that ability to pass on higher costs allows corporate profits \u2014 and ideally, share prices \u2014 to adjust upward. While not every stock offers protection, businesses with strong pricing power, essential products and healthy balance sheets tend to hold up better when inflation erodes purchasing power.<\/p>\n For investors who don\u2019t want the pressure of correctly picking winners and losers, there\u2019s a simpler way to gain exposure to high-quality companies \u2014 one endorsed by legendary investor Warren Buffett.<\/p>\n \u201cIn my view, for most people, the best thing to do is own the S&P 500 index fund,\u201d Buffett has famously stated (9).<\/p>\n This approach gives investors exposure to 500 of America\u2019s largest companies across a wide range of industries, providing instant diversification without the need for constant monitoring or active management.<\/p>\n The beauty of this approach is its accessibility \u2014 anyone, regardless of wealth, can take advantage of it. Even small amounts can grow over time with tools like Acorns<\/a>, which automatically invests your spare change.<\/p>\n Signing up for Acorns takes just minutes: Link your cards, and Acorns will round your purchases to the nearest dollar, investing the difference \u2014 your spare change \u2014 into a diversified portfolio. That $4.25 coffee every morning? It\u2019s now a 75-cent investment in your future.<\/p>\n With Acorns, you can invest in an S&P 500 ETF with as little as $5 \u2014 and, if you sign up today, Acorns will add a $20 bonus<\/a> to help you begin your investment journey.<\/p>\n Beyond gold and equities, real estate remains one of the most powerful ways investors have sought to protect their wealth from inflation. Besides, Morgan Stanley\u2019s 60\/20\/20 breakdown could just as easily be applied to alternative assets as a whole \u2014 not just gold.<\/p>\n When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.<\/p>\n Over the past five years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped by 45% as of Sept. 2025 (10), reflecting strong demand and limited housing supply.<\/p>\n High home prices can make buying a home more challenging, especially with mortgage rates still elevated. And being a landlord isn\u2019t exactly hands-off work \u2014 managing tenants, maintenance and repairs can quickly eat into your time (and returns).<\/p>\n The good news? You don\u2019t need to buy a property outright \u2014 or deal with leaky faucets \u2014 to invest in real estate today. Crowdfunding platforms like Arrived<\/a> offer an easier way to get exposure to this income-generating asset class.<\/p>\n Backed by world-class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100<\/a>, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.<\/p>\n The process is simple: Browse a curated selection of homes pre-vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you\u2019d like to purchase and sit back as you start receiving any positive rental income distributions<\/a> from your investment.<\/p>\n Another option is Homeshares<\/a>, which gives accredited investors access to the $34.9 trillion U.S. home equity market \u2014 a space that\u2019s historically been the exclusive playground of institutional investors.<\/p>\n Homeshares<\/a> allows accredited investors to gain direct exposure to a portfolio of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund \u2014 without the hassles of buying, owning or managing property.<\/p>\n The fund focuses on homes with substantial equity, using Home Equity Agreements (HEAs to let homeowners access liquidity without taking on debt or interest payments. This creates an attractive, low-maintenance investment vehicle for retirement savers, with a minimum investment of $25,000.<\/p>\n With risk-adjusted target returns of 14% to 17%, the U.S. Home Equity Fund offers investors access to America\u2019s largest store of household wealth<\/a>.<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n @peterschiff (1<\/a>); Wells Fargo Advisors (2<\/a>); BLS (3<\/a>); Reuters (4<\/a>); Forbes (5<\/a>); @Schiffgold (6<\/a>); Barrons (7<\/a>); APMEX (8<\/a>); CNBC (9<\/a>); S&P Cotality Case-Shiller U.S. National Home Price NSA Index (10<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Gage Skidmore \/ Wikimedia Commons Moneywise and Yahoo Finance LLC may earn commission or revenue through links in…\n","protected":false},"author":2,"featured_media":377005,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,155,101,184331,74523,184332,162,160,1168,1535,107314,131042,724],"class_list":{"0":"post-377004","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-dave-ramsey","10":"tag-economy","11":"tag-inflation-hedge","12":"tag-inflation-rates","13":"tag-inflation-spikes","14":"tag-investment","15":"tag-investors","16":"tag-jeff-bezos","17":"tag-morgan-stanley","18":"tag-peter-schiff","19":"tag-purchasing-power","20":"tag-warren-buffett"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/377004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=377004"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/377004\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/377005"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=377004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=377004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=377004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}