You split it 60/40.
The risk did not read the memo.
94%
Share of a 60/40 portfolio's risk carried by the equity sleeve alone
A friend showed me his balanced allocation on Saturday. 60 percent in equity, 40 percent in debt. Felt safe. Felt diversified. I ran the actual risk numbers on it. The 40 percent sitting in debt was carrying about 6 percent of the real risk. His balanced portfolio was an equity portfolio wearing a seatbelt made of paper.