Has the 60-40 equity/fixed-income portfolio outlived its usefulness? Many wealth managers believe the traditional balanced investment formula is now passé or, at the very least, in need of a major overhaul.

Count Bob Rice, co-founder and managing partner at New York–based Tangent Capital Partners, among the most skeptical. He argues that fixed income no longer performs its insurance function in today’s ultra-low-rate environment.

“Bonds were historically thought of as the ballast to stocks, so they were the downside protection,” Rice explains. “If the stock market tumbled, the bond market would improve.” But that’s a highly debatable proposition when yields on the U.S. Treasury’s benchmark ten-year notes have been hovering just a touch above 2 percent, he says, adding, “There are only so many numbers between two and zero. The math just doesn’t work.”

The other part of the balanced formula — equities — is just as problematic, Rice contends. Key valuation metrics such as the Tobin’s Q (a company’s market value divided by the replacement value of its assets), gross domestic product divided by market capitalization and the Shiller cyclically adjusted price-to-earnings ratio are “standing at pretty close to two standard deviations north of the long-term averages,” he says, constraining stocks’ upside potential. “You cannot argue that, historically speaking, stocks aren’t extremely rich right here.”

Stock valuations could go higher, Rice acknowledges, as long as the U.S. Federal Reserve Board keeps printing money “ad infinitum,” but that’s not likely to happen, given comments by Fed chair Janet Yellen in late September that “most” of her colleagues thought a rate hike would be appropriate this year. In light of the comments, he says, “how can you justify being in the 60-40 portfolio when there are so many other good options to consider?” Rice cites activist investing, global macro and equity long-short strategies among possible alternatives to the classic balanced portfolio. He also contends that distressed debt is on the cusp of coming back into favor.

Notwithstanding critics like Rice, the 60-40 portfolio has staying power. Balanced mutual funds managed $556.5 billion in assets as of late October, according to research firm Thomson Reuters Lipper.

“You can look at the past few years, and the 60-40 has really kind of beaten everything out there,” says Kevin Dorwin, managing principal with Bingham, Osborn & Scarborough, a San Francisco–based registered investment adviser that manages about $3.5 billion. “It’s done a pretty darn good job even after the financial crisis, when everyone had written it off.”