Bonds and the 60/40 Portfolio Are Dead – Where to Invest Instead

Financial advisors have long touted the 60/40 portfolio as the silver bullet to managing retirees’ portfolios.  By investing 60% of investable assets in stocks and 40% in bonds, historically, this portfolio construction has achieved diversification, volatility reduction, and solid appreciation.  The ultimate goal, of course, is ensuring said portfolio will provide for an enjoyable lifestyle, and funds will not run dry prior to death. 

Falling interest rates make bond prices rise and bond yields decline, as rates and prices are inversely related.  For the last 40 years this scenario has been the reality, leading bond values to rise as rates have plummeted.

However, just because something has worked in the past, does not guarantee it will continue to work in the future. Although traders can beat bond indices through duration and credit bets, the majority of bond holders are passive investors, receiving coupon payments while holding until maturity. 

Loose monetary policy over the last decade plus, as part of the financial crisis recovery plan, has proven difficult to unwind without financial calamity.  COVID-19 further complicated the situation, as central bankers provided unprecedented, additional liquidity to markets, while lowering the federal funds rate again, in an effort to stave off a major recession or depression.  This has led to a very difficult environment for fixed-income investors, who rely on risk-off investments to balance their retirement portfolios and pay income, i.e. bond investors.  At the time of this writing, the 10-year treasury is yielding 1.3%, considered the “risk-free rate of return.” 

With all the money flooding into the economy, inflation has begun to appear.  And this is not just asset price inflation, but consumer goods and services are trending towards higher prices.  Even if the Fed calls inflation “transitory” due to supply/demand imbalances created by the COVID-19 shutdown and subsequently, they are not forced to raise rates, it is prudent to predict interest rates are not headed lower.  When interest rates begin to normalize (i.e. rise), bond prices will fall, while yields on new issue bonds will still have a long way to go before they pay income worth considering for most investors.

What’s a fixed-income investor to do?  One alternative solution is investing in private real estate offerings, otherwise known as real estate syndications, as a passive investor. 

Bonds play four primary roles in portfolio construction – income generation, capital preservation, appreciation opportunity, and a hedge against an economic slowdown.  I’ll show how investing passively in real estate syndications can meet these same objectives and outperform bonds in our current economy. 


Income generating investments that create cash flow become top of mind when paychecks cease to exist after retiring.  It is more palatable to take longer-term, risk-on bets that offer higher appreciation opportunities, when you have a long runway of working years left – but not after the paychecks stop. 

As noted previously, the risk-free rate of return (the 10-year treasury) is currently yielding just 1.3%.  Corporate and municipal bonds will pay more, but it will be a struggle to find anything investment grade above 3% unless you look out 30 years.  Junk bonds pay slightly higher, but the yield spread between investment grade bonds and junk bonds makes the risk-reward unattractive due to much higher credit risk. 

Alternatively, real estate syndications offer preferred returns in the 7-9% range, typically paid monthly or quarterly.  You can invest in industrial, multifamily, self-storage facilities, mobile home parks, hotels, retail, office, ATM machines, and an array of other classes of property.  And you won’t have to wait 30 years for maturity, as most offerings aim to return capital to their investors in 5-7 years.

With May’s inflation data showing that the CPI rose ~5%, bonds are producing a negative real rate of return.  By holding them, you’re losing purchasing power as time goes by.   

Capital Preservation

The primary goal of a retiree, before achieving any capital appreciation, is preservation of principal.  After all, who wants to take heavy losses after the paychecks stop coming in, only to find themselves forced to go back into the workforce. 

Inflation is causing the devaluation of the dollar, leading investors to look for a “store of value” for their money.  Gold has often served this role in a portfolio.  However, gold doesn’t meet one of the primary objectives of bonds, as it pays no income. 

By investing in a real estate syndication as a passive investor, you now own a piece of a “hard asset” – one that has scarcity in good locations with high demand and low supply.  Scarcity and demand ensure that your real estate investment will hold its value and more than likely lead to appreciation.


Real estate has outperformed over the last decade, offering 10%+ cash-on-cash returns and 20%+ internal rate of return (IRR) for massive annualized gains in many deals.  With the benefit of leverage and tax incentives only available to real estate, returns are amplified.  When considering the paltry income bonds pay, it’s no wonder capital has made its way into real estate, compressing cap rates and yield spreads.  

Although it can’t be guaranteed that this level of performance will continue, real estate is positioned well to continue to outperform.  Why?  Here it is again – Inflation.  Rents have been rising faster than inflation for years, and have recently begun to accelerate again after taking a breather in 2020.  Since commercial properties and apartments are valued based on the income they produce, rising rents make property values rise.  True rent growth (lease-over-lease) jumped 11.1% in June year-over-year in the US downtown apartment space in 2021.  While this data doesn’t account for concessions made to tenants during the COVID-19 shutdown, it is a good indicator that rents are rising faster than inflation, thus increasing valuations. 

On the other hand, bonds are likely to depreciate, losing investor principal in the near-term.  With interest rates at their lowest levels in history, a reversal to the norm would send bond prices plummeting. 

Hedge Against Economic Slowdown

Bonds have historically done well when stocks have done poorly, protecting investors by reducing portfolio volatility through asset diversification.  In challenging environments, stocks tend to waiver, leading the Fed to cut rates to provide a spark to the economy.  Lowering interest rates has led to appreciation of bonds, and a negative correlation with stocks.  As discussed, this is unlikely to continue. 

Investing in real estate syndications as a passive investor can fill the void left by bonds.  Private real estate offerings are illiquid, have higher transactions costs, and have fewer prospective buyers and sellers as compared to public markets.  While this doesn’t sound favorable initially, it is actually one of the main reasons these types of investments are less correlated with the stock market and perform well during economic slowdowns. 

Because the assets held by real estate syndications are traded at a far lower frequency, and have a less efficient market, there is very little change in their values day-to-day in comparison to publicly traded investments, like stocks or even REITs

One caveat to consider prior to investing is your liquidity needs, as real estate syndications are best for investors who don’t need access to their principal for 5-7 years.  


Bonds are dead, and with them, the traditional 60/40 portfolio – at least in the short- to medium-term for the average investor, anyways.  I personally won’t be buying any bonds until the 10-year is above 2.5%. Retirees need to look elsewhere for a large chunk of their portfolios to fill the void left by bonds. 

While investing passively in private real estate syndications isn’t the only option, it’s a very good one.  It is certainly worth considering for those who are seeking retirement income and diversification through an inflation-protected, hard asset with tax advantages. 

Paul Shannon is a full-time active real estate investor, as well as a limited partner in a number of syndications.  Prior to leaving the corporate world, Paul worked for a medical device company, selling capital equipment to surgeons in the operating room.  After completing a few rehabs employing the “BRRRR method”, he saw scalability and more control over how he spent his time, and left to pursue real estate in 2019.  Since then, Paul has completed over a dozen rehabs on both single-family and multifamily properties.  He currently owns over 50 units in Indianapolis and Evansville, IN and is a limited partner in larger apartments and industrial properties across the US. You can connect with him at

Nothing on this website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial and tax advisors regarding any investment.

Chris Franckhauser

Vice President of Strategy & Growth, Advisory Partner

Chris Franckhauser, Vice President of Strategy & Growth, Advisory Partner for Left Field Investors, has been involved in real estate since 2008. He started with one single-family fix and flip, and he was hooked. He then scaled, completing five more over a brief period. While he enjoyed the journey and the financial tailwinds that came with each completed project, being an active investor with a W2 at the time, became too much to manage with a young and growing family. Seeing this was not easily scalable or sustainable long term, he searched for alternative ideas on where to invest. He explored other passive income streams but kept coming back to his two passions; real estate and time with his family. He discovered syndications after reconnecting with a former colleague and LFI Founder. He joined Left Field Investors in 2023 and has quickly immersed himself into the community and as a key member of our team.  

Chris earned a B.S. from The Ohio State University. After years in healthcare technology and medical devices, from startups to Fortune 15 companies, Chris shifted his efforts to consulting and owning a small apparel business when he is not working with LFI (Left Field Investors) or on his personal passive investments. A few years ago, Chris and his family left the cold life in Ohio for lake life in the Carolinas. Chris lives in Tega Cay, South Carolina with his wife and two kids. In his free time, he enjoys exploring all the things the Carolinas offer, from the beaches to the mountains and everywhere in between, volunteering at the school, coaching his kids’ sports teams and cheering on the Buckeyes from afar.  

Chris knows investing is a team sport. Being a strategic thinker and analytical by nature, the ability to collaborate with like-minded individuals in the Left Field Community and other communities is invaluable.  

Jim Pfeifer

President, Chief Executive Officer, Founder

Jim Pfeifer is one of the founders of Left Field Investors and the host of the Passive Investing from Left Field podcast. Left Field Investors is a group dedicated to educating and assisting like-minded investors negotiate the nuances of the passive investing landscape and world of syndications. Jim is a former financial advisor who became frustrated with the one-path-fits-all approach of the standard financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning a different way to grow wealth.

Jim not only advises and helps people get started in passive real estate syndications, he also invests alongside them in small groups to allow for diversification among multiple investments and syndication sponsors. Jim believes the most important factor in a successful syndication is finding a sponsor that he knows, likes and trusts.

He has invested in over 100 passive syndications including apartments, mobile homes, self-storage, private lending and notes, ATM’s, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. Jim is constantly looking for new investment ideas that match his philosophy of real assets producing cash flow as well as looking for new sponsors with whom he can build quality, long-term relationships. Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Chad Ackerman

Chief Operating Officer, Founder

Chad is the Founder & Chief Operating Officer of Left Field Investors and the host of the LFI Spotlight podcast. Chad was in banking most of his career with a focus on data analytics, but in March of 2023 he left his W2 to become LFI’s second full time employee.

Chad always had a passion for real estate, so his analytics skills translated well into the deal analyzer side of the business. Through his training, education and networking Chad was able to align his passive investing to compliment his involvement with LFI while allowing him to grow his wealth and take steps towards financial freedom. He has appreciated the help he’s received from others along his journey which is why he is excited to host the LFI Spotlight podcast and share the experience of other investors and industry experts to assist those that are looking for education for their own journey.

Chad has a Bachelor’s Degree in Business with a Minor in Real Estate from the University of Cincinnati. He is working to educate his two teenagers in the passive investing world. In his spare time he likes to golf, kayak, and check out the local brewery scene.

Ryan Steig

Chief Financial Officer, Founder

Ryan Stieg started down the path of passive investing like many of us did, after he picked up a little purple book called Rich Dad, Poor Dad. The problem was that he did that in college and didn’t take action to start investing passively until many years later when that itch to invest passively crept back up.

Ryan became an accidental landlord after moving from Phoenix back to Montana in 2007, a rental he kept until 2016 when he started investing more intentionally. Since 2016, Ryan has focused (or should we say lack thereof) on all different kinds of investing, always returning to real estate and business as his mainstay. Ryan has a small portfolio of one-to-three-unit rentals across four different markets in the US. He has also invested in over fifty real estate syndication investments individually or with an investment group or tribe. Working to diversify in multiple asset classes, Ryan invests in multi-family, note funds, NNN industrial, retail, office, self-storage, online businesses, start-ups, and several other asset classes that further cement his self-diagnosis of “shiny object syndrome”.

However, with all of those reaches over the years, Ryan still believes in the long-term success and tenets of passive, cash-flow-focused investing with proven syndicators and shared knowledge in investing.

When he’s not working with LFI or on his personal passive investments, he recently opened a new Club Pilates franchise studio after an insurance career. Outside of that, he can be found with his wife watching whatever sport one of their two boys is involved in during that particular season.

Steve Suh

Chief Content Officer, Founder

Steve Suh, one of the founders of Left Field Investors and its Chief Content Officer, has been involved with real estate and alternative assets since 2005. Like many, he saw his net worth plummet during the two major stock market crashes in the early 2000s. Since then, he vowed to find other ways to invest his money. Reading Rich Dad, Poor Dad gave Steve the impetus to learn about real estate investing. He first became a landlord after purchasing his office condo. He then invested passively as a limited partner in oil and gas drilling syndications but quickly learned the importance of scrutinizing sponsors when he stopped getting returns after only a few months. Steve came back to real estate by buying a few small residential rentals. Seeing that this was not easily scalable, he searched for alternative ideas. After listening to hundreds of podcasts and attending numerous real estate investing meetings, he determined that passively investing in real estate syndications was the best avenue to get great, risk-adjusted returns. He has invested in dozens of syndications involving apartment buildings, self-storage facilities, resort properties, ATMs, Bitcoin mining funds, car washes, a coffee farm, and even a Broadway show.

When Steve is not vetting commercial real estate syndications in the evenings, he is stomping out eye diseases and improving vision during the day as an ophthalmologist. He enjoys playing in his tennis and pickleball leagues and rooting for his Buckeyes and Steelers football teams. In the past several years, he took up running and has completed three full marathons, including the New York City Marathon. He is always on a quest to find great pizza, BBQ brisket, and bourbon. He enjoys traveling with his wife and their three adult kids. They usually go on a medical mission trip once a year to southern Mexico to provide eye surgeries and glasses to the residents. Steve has enjoyed being a part of Left Field Investors to help others learn about the merits of passive, real asset investments.

Sean Donnelly

Chief Culture Officer, Founder

Sean holds a W2 job in the finance sector and began his real estate investing journey shortly after earning his MBA. Unfortunately, it could not have begun at a worse time … anyone remember 2007 … but even the recession provided worthy lessons. Sean stayed in the game continuing to find his place, progressing from flipping to owning single and multi-family rentals to now funding opportunities through syndications. While Sean is still heavily invested in the equities market and holds a small portfolio of rentals, he strongly believes passive investing is the best way to offset the cyclical nature of traditional investment vehicles as well as avoid the headaches of direct property ownership. Through consistent cash flow, long term yield and available tax benefits, the diversification offered with passive investing brings a welcomed balance to an otherwise turbulent investing scheme. What Sean likes most about the syndication space is that the investment opportunities are not “one size fits all” and the community of investors genuinely want to help.

He earned a B.S. in Finance from Iowa State University in 1995 and a MBA from Otterbein University in 2007. Sean has lived in eight states but has called Ohio home for the last 20+.  When not attending his children’s various school/sporting events, Sean can be found running, golfing, shooting or fly-fishing.

Patrick Wills

Chief Information Officer, Advisory Partner

An active real estate investor since 2017, Patrick Wills’ investing journey began like many others – after reading the “purple book” by Robert Kiyosaki. Patrick started with single family rentals, and while they performed well, he quickly realized their inability to scale efficiently while remaining passive. He discovered syndications via podcasts and local meetups and never looked back. He joined Left Field Investors in 2022 as a member and has quickly become an integral part of the team as Vice President of Technology.

An I.T. Systems Engineer by trade, he experienced the limitations of traditional Wall Street investing firsthand in his career and knew there had to be a better way to truly have financial freedom.

Unfortunately, that better way is inaccessible to those who need it most. His mission is to make alternative investments accessible to everyone who seeks to take control of their financial future and to pursue their passions in life.

Contact Us

Stay Connected!

Sign up to be notified of our latest articles and meeting announcements.

Stay Connected!

Sign up to be notified of our latest articles and meeting announcements.