The traditional portfolio model is typically 60/40: 60 percent in stocks (equities) and 40 percent in bonds (credit).
The rationale is straightforward. Stocks provide growth opportunities, while bonds help reduce risk and cushion your portfolio during market downturns.
For all its popularity, however, the 60/40 split has only ever been a rule of thumb for retail investors. It is not the way large institutions or wealthy families have typically built portfolios.1
These groups—sometimes referred to as “sophisticated investors”—generally dedicate a meaningful share of their portfolios to private assets, like private equity and private credit. But these investments also carry risks that differ from public markets, including limited liquidity.
In fact, private-market allocations among institutional investors reached a record high in 2026.2 Wealthy families are following a similar path, with private assets now accounting for nearly half of the average ultra-high-net-worth portfolio.3
Historically, gaining access to private assets often required a relationship with the right asset manager or the ability to write a very large check. Now, that's changing.
Individual investors have more access than ever to private markets, raising the question of whether a portfolio built solely around stocks and bonds still reflects their goals.
Let’s consider a few points.
Bonds may not cushion portfolios the way they once did. In recent years, the correlation between stocks and bonds has turned positive in certain periods, meaning the two asset classes may move in the same direction. When bonds' primary role is to offset equity-market risk, that's worth watching.4
Private markets have historically exhibited lower correlation with public markets. Strategies like private equity and venture capital are driven by different underlying factors than publicly traded stocks. That can make them a potential source of diversification, especially as stocks and bonds start to move together.5 However, private-market investments involve additional risks, including limited liquidity.
Companies are staying private longer. In the 1980s and ‘90s, the median company went public within 5–10 years of its founding. Today, it's more than 15.6 That means a greater share of value creation may be taking place in private markets.6
More companies are moving from public to private markets. Since 2022, the volume of public companies going private has outpaced new IPOs by more than 3.5x. That means public markets may represent a smaller share of the economy than they did a generation ago.7
These are a few of the reasons why institutions and wealthy families have cited when allocating more of their capital to private assets.
And it’s why a portfolio framework developed in 1952 deserves a fresh look in 2026. Markets have changed, and some investors are taking notice.8
Explore private market opportunities to build a portfolio with Crowd Street today.
*Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Past performance is not indicative of future results. All investments involve risk, including the possible loss of principal. Private-market investments, including private equity, private credit, venture capital, and real estate, involve unique risks and may be speculative, illiquid, and subject to limited transparency. Investors should carefully consider their investment objectives, risks, charges, and expenses before investing.
