Investors seeking to boost returns in their 60/40 portfolio should look to what AllianceBernstein calls "the magnificent others." The firm thinks the traditional balance of 60% stocks and 40% bonds makes sense for investors, with the Federal Reserve expected to start cutting interest rates later this year, setting the table for a soft landing.
"As free cash flow goes up, as an investor, you can take advantage of the possibility of a rising stream of income in the form of rising dividends because free cash flow is forecast to grow well beyond where fed funds rates are expected to be, say, in the next two to three years." However, investors should not just buy a stock based on its dividend yield. In fact, those with very high yields may not be able to sustain them, said Czaicki.