Welcome, Sandbox friends.
Today’s Daily discusses:
long-term investing approaches under pressure
Let’s dig in.
Blake
Markets in review
EQUITIES: Russell 2000 +0.66% | Nasdaq 100 +0.37% | Dow +0.17% | S&P 500 +0.06%
FIXED INCOME: Barclays Agg Bond +0.11% | High Yield -0.04% | 2yr UST 3.545% | 10yr UST 4.087%
COMMODITIES: Brent Crude -1.59% to $64.31/barrel. Gold -0.45% to $3,879.8/oz.
BITCOIN: +2.82% to $120,765
US DOLLAR INDEX: +0.13% to 97.833
CBOE TOTAL PUT/CALL RATIO: 0.77
VIX: +2.09% to 16.63
Quote of the day
“The world breaks everyone and afterward many are strong at the broken places.”
- Ernest Hemingway
Long-term investing approaches under pressure
Investing disciplines are never static.
What worked for one generation often needs to be retooled for the next – shaped by shifting market dynamics, new tools and technology, and progress across socioeconomic and cultural trends.
For decades, two ideas formed the foundation for long-term investors, but the world is changing and these cornerstones are starting to wobble.
The 60/40 portfolio
For as long as I can remember, the 60/40 portfolio – 60% stocks, 40% bonds – was the bedrock of wealth management.
Diversification between equities and bonds delivered the smooth ride that investors savored across generations. Stocks fueled the growth, while bonds provided ballast and income.
But, here in 2025, higher inflation, volatile interest rates, and tighter correlations across global markets have strained that framework.
In 2022, the cracks showed: the S&P 500 fell -18%, while the Bloomberg Aggregate Bond Index dropped -13%. For a strategy built on balance, that was a gut punch.
Today, investors are being more thoughtful and proactive – mixing in alternative asset classes like private markets, real estate, commodities, and even digital assets – to shore up diversification and deliver uncorrelated risk and return streams.
In fact, talk to someone 40-years old and younger and you’re almost guaranteed an eye roll when bringing up 60/40.
Simply put, for many investors, the old “stocks and bonds are enough” playbook no longer holds water.
Dollar-cost averaging
The other long-term staple, dollar-cost averaging or DCA for short, was designed for patient savers.
Contribute a little each month, let compounding quietly work in the background, and reap the rewards decades later.
But we live in a TikTok world now: 15-second videos, swipe-right dating apps, and same-day Amazon delivery.
Our culture no longer rewards patience.
So, it’s no surprise many retail investors are rejecting strategies that only pay off decades from now.
It also doesn’t help when the math probabilistically supports lump-sum investing over dollar-cost averaging, assuming an emotional vacuum of course.
Looking ahead
Neither the 60/40 portfolio nor dollar-cost averaging is dead. They still have a role in modern day portfolio construction.
But, they’re no longer unchallenged truths and they aren’t suitable for everyone.
In today’s environment, investors need to adapt, not abandon, these older investing disciplines.
The hardest part isn’t the math. It’s resisting the pressure of a world that runs faster than compounding ever could.
Sources: J.P. Morgan Guide to the Markets, Nick Maggiulli
That’s all for today.
Blake
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Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.
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