A billionaire energy trader described a simple portfolio that bypasses the 60/40 strategy

John Arnold, a former energy trader and philanthropist whose fortune is estimated at $2.8 billion, said he has found the secret to success in the stock market. He told social network X that his portfolio, equally divided between the technology and energy sectors, has never shown a negative return over the past six years.

Arnold confirms the result of his strategy using the Sharpe ratio, a financial ratio that measures investment performance through the ratio of an asset's return to its volatility: the higher it is, the better the risk-adjusted bottom line.

Arnold calculates that the Sharpe ratio of his portfolio, which combines two exchange-traded funds in technology and energy, was 1.16 versus 0.83 for the technology sector and 0.50 for the energy sector. The portfolio itself has remained in the plus side every year of observation since 2020: it added 6% in 2020, 44% in 2021, 18% in 2022, 28% in 2023, 14% in 2024, 16% in 2025, and 15% since the start of 2026.

To support his position, Arnold points in particular to the results of 2022 and early 2026. In 2022, the technology sector fell 28%, but the energy sector rose 64%, allowing the combined portfolio to remain in the plus column. In 2026, by contrast, technology lost 8% but energy added 38%, keeping the combined portfolio in the plus again.

The Arnold portfolio performed better than the classic 60/40 balanced portfolio of stocks and bonds, including in 2022, when the traditional combination of stocks and government bonds took double-digit losses amid an inflation shock and sharp monetary tightening. In some years, Arnold's portfolio lagged the S&P 500 Index fund, which added particularly strongly between 2023 and 2025. But unlike the main U.S. index, Arnold has never gone negative.

Arnold himself did not explain the logic of his strategy, but it can be assumed that it is tied, on the one hand, to the fact that the rapid growth of new technologies, including artificial intelligence, is changing the global economy, writes MarketWatch. On the other hand, the energy sector remains highly dependent on geopolitics: Russia's invasion of Ukraine and a U.S. and Israeli attack on Iran in 2026 have led to disruptions in oil and gas supplies and higher prices.

But such a portfolio also has weaknesses: theoretically, risks could affect both parts of the portfolio at the same time. For example, fears about excessive spending on artificial intelligence will be confirmed and the technology sector will come under pressure. And governments will respond to rising energy prices by imposing taxes on excess profits. Then the energy sector will be hit - even as prices continue to rise. But according to the data Arnold cited, both sectors have not fallen at the same time in the last six years.

Louis-Vensant Gave, founder of research company Gavekal, takes a similar approach. He believes that in an environment of structurally higher inflation, investors need a portfolio with 60% in equities, 20% in precious metals and another 20% in energy.

According to Gav, the events of the past five years have shattered basic assumptions about how global trade, security and capital protection work. U.S. Treasury securities are no longer perceived as a reliable pillar, the U.S. Navy as a guarantor of the safety of sea routes, and the U.S. itself as a country interested in maintaining the global trading system. Even if the conflict over Iran ends with a truce in the coming days, the principles on which policies and investment portfolios were built for decades are no longer working, Gove says.

This article was AI-translated and verified by a human editor