According to Bespoke Investment Group, the classic allocation of 60% stocks and 40% bonds has seen a jump of approximately 7.3% this month on a total return basis. This impressive showing could potentially rank as the second-best performance in over 30 years.

The U.S. stock market has played a key role in driving the notable gains seen in November. The S&P 500 index has risen by 8.3%, on track for its strongest month since July 2022, based on FactSet data. Concurrently, the iShares Core U.S. Aggregate Bond ETF has been performing well, potentially delivering its largest monthly total return since December 2008, with an increase of around 4.7% in November.

Despite the remarkable surge this month, the total returns for the 60-40 stocks-bonds portfolio still remain in a drawdown. As Bespoke points out, the portfolio's total return index is currently lower compared to the peak in July, let alone the all-time highs witnessed in December 2021.

This ongoing drawdown represents the third-longest period of below-average performance for the 60-40 portfolio since at least 1975, as highlighted in the note from Bespoke. However, unlike the previous two drawdowns, which were primarily influenced by equity market declines, the current situation is impacted by both equity and bond markets.

In a positive note, Bespoke emphasizes that historically, significant gains have typically paved the way for further advances in the 60-40 portfolio. Investors, therefore, may have reason to anticipate future growth and a potential rebound from this extended drawdown.

At present, the U.S. stock market has been trading mostly lower in Thursday afternoon's session, with the S&P 500 reflecting this trend. Despite this, the impressive performance of the 60-40 portfolio in November demonstrates the resilience and potential for strength in a balanced approach to investment.

Overall, the 60-40 portfolio's robust showing this month underscores the importance of diversification and balancing risk in the current market climate. While the drawdown persists, investors can take solace in the historical patterns, suggesting potential growth and future rewards for those embracing the traditional blend of stocks and bonds.