Lead-Lag Live The 60/40 Portfolio Is Dead: Risk Parity in a World on Fire
Mar 30, 2026
Alex, Co-CIO at Evoke Advisors and architect of the RPAR and UPAR risk parity ETFs, explains why the classic 60/40 split is breaking down. He compares today’s risks to 1970s stagflation, weighs AI-driven disinflation against de-globalization, and outlines risk parity principles, leverage mechanics, and how commodities and gold behave when inflation matters.
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1970s Is The Closest Stagflation Parallel
- The 1970s is the closest parallel for today because stocks and bonds underperformed cash during extended stagflation.
- Alex warns inflation could surprise above current market discounts due to debt dynamics, raising stagflation risk if growth weakens.
Crosscurrents Make Inflation Unpredictable
- Multiple structural cross-currents complicate inflation's path: AI-driven disinflation, rising oil, and de-globalization can pull in opposite directions.
- Alex emphasizes rising debt creates incentives to tolerate higher inflation to reduce real debt burdens.
Hedge With Real Assets Against Inflation
- Add inflation-hedge assets because stocks and bonds can both do poorly when inflation surprises up.
- Alex recommends non-dollar real assets like commodities and gold as hedges against currency debasement.