Given the fact that stocks tanked 19.5% last year — and even bonds fell, by 12.9% — it is no wonder that the question of whether the traditional portfolio of 60% equities and 40% bonds still makes sense, The Wall Street Journal reports.

On one side of the 60/40 investing debate is BlackRock, the world’s biggest money manager, which would like to upend the traditional approach.

In the opposite corner is investment banking giant Goldman Sachs, a proponent of the established formula.

Goldman says stocks and bonds losing money at the same time over a 12-month period is an aberration that has only happened 2% of the time since 1926.

Goldman Sachs Chief Investment Officer of Wealth Sharmin Mossavar-Rahmani believes that a 60/40 portfolio is the most intelligent approach to investing since no one can predict the future, and diversified investments tumbling in lock-step is rare.

If BlackRock—which is heavily invested in private debt, private equity, commodities, infrastructure and inflation-linked bonds—wins the day, it would capsize traditional portfolios, Goldman goes on to contend. These exotic instruments, it believes, should only be small additions to a 60/40 portfolio of core equities and bonds.

But Vivek Paul, head of portfolio research at BlackRock Investment Institute, maintains, “This is a different regime. The great moderation is over.”

Should inflation continue to remain high, with high bond yields portending badly for stocks, BlackRock may have a point.

However, drilling deeper into alternatives investment performance last year, they didn’t fare much better than stocks or bonds. Time-tested Treasury Inflation Protected Securities, or TIPS, which are supposed to protect against inflation, lost as much as Treasurys in 2022. And private equity and debt investments are opaque, so you cannot always be sure of how much you have earned or lost.

Even commodities didn’t behave as they normally do last year. Spot prices of crude oil, natural gas, gold and copper all ended the year close to where they started, so it wasn’t a buy-and-hold market for this investment class, either.

A final argument in favor of a traditional 60/40 portfolio, as opposed to moving into a new paradigm of alternatives, is that stock valuations have come down considerably to a point that many are now attractive buys.

Perhaps, WSJ concludes, a 60/40 portfolio with a higher exposure to TIPS and other inflation-protection securities like I-Bonds, is the solution—at least for now.