In the midst of volatile markets, continued steep rate hikes from the Federal Reserve, and a lackluster third-quarter earnings season, investors have plenty of reasons to be wary.

Those with a traditional portfolio of 60% stocks and 40% bonds—a mix intended to provide good risk-adjusted returns—have seen their holdings drop about 20% through the third quarter. Stocks staged a turnaround Monday and were rising Tuesday—amid better-than-expected bank earnings and as the U.K. reversed course on tax proposals that had hit the British pound—but the S&P 500 was still down nearly 23% through Monday’s market close.

Published by Abby Schultz in Barron’s.