The 60/40 stocks-bonds portfolio, a traditional investment strategy that has been popular for the past 40 years due to low inflation and strong economic growth, is facing challenges as it is not immune to all market conditions.

Investment opportunities exist all around the globe, but the randomness of global stock returns makes it exceedingly difficult to figure out which markets are likely to be outperformers. How should investors deal with this kind of uncertainty?

Why should long-term investors care about market forecasts? Vanguard, after all, has long counseled investors to set a strategy based on their investment goals and to stick to it, tuning out the noise along the way.

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"For the first time in years of quantitative publications, we argue that the usual irrelevant noise of daily fluctuations becomes now immensely informative."

"All of the wealth creation can be attributed to the thousand top-performing stocks, while the remaining 96 percent of stocks collectively matched one-month T-bills."