Why Gold’s Rally Is Reshaping the Way Investors Think About Risk
As inflation erodes faith in bonds and gold smashes records above $4,300, investors are rewriting the classic 60/40 playbook—ushering in a bold new era of 60/20/20 portfolios powered by gold, bitcoin, and silver.
Editorial Team (ET)October 18, 2025
For decades, the 60/40 portfolio—60% equities and 40% bonds—was the gold standard of balanced investing. But in 2025, that once-sacred formula is being rewritten. Gold has soared past $4,300 an ounce, bitcoin is trading near record highs, and investors are tearing pages out of the old rulebook. The new strategy taking hold on Wall Street? A 60/20/20 mix—60% equities, 20% fixed income, and 20% alternatives like gold, silver, and cryptocurrencies.
Todd Rosenbluth: “We Are Seeing Greater Adoption of Alternatives”
Todd Rosenbluth, Head of Research at VettaFi, summed up the shift succinctly in an interview with CNBC: “We are seeing greater adoption of non-equity, non–fixed-income products.” His statement reflects a growing consensus among strategists that the traditional hedge role of bonds has been eroded. With inflation running hot, government debt ballooning, and yields offering less real protection, investors are turning to assets that move differently from stocks and bonds.
Rosenbluth notes that in the current macro climate, equities and fixed income have started to correlate—falling and rising in tandem—diminishing diversification benefits. “Stocks and bonds are moving in the same direction too often,” he said. “Investors need new levers to smooth returns.”
Steve Schoffstall: From Fringe to Foundation
At the heart of this movement is gold’s reemergence as a core asset, not a niche hedge. Steve Schoffstall, Director of ETF Product Management at Sprott, believes this is more than a passing fad. “What’s really happening now is a shift into the acceptance of gold,” he told CNBC’s ETF Edge. “It’s been viewed as a fringe allocation tool, but what we’re really starting to see now is more prominent economists suggest shifting from 60/40 to something closer to 60/20/20.”
Schoffstall emphasizes that investors don’t need to go all-in on precious metals, but they should have meaningful exposure. “For most people, we feel they are probably well positioned if they have a 5%–15% allocation to physical gold,” he said.
His comments come as the SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) ETFs post record inflows. According to the World Gold Council, gold ETFs saw nearly $11 billion in inflows in September alone, the largest monthly surge in history. Sprott reports that total investor movement into gold funds in 2025 has surpassed $38 billion, a figure that underlines the new role gold is playing in modern portfolios.
