The logic is that equities supply growth while bonds supply income and, in most historical recessions, a cushion when equities fall. The combination has historically produced a smoother path than all-equity investing at a modest cost in long-run return.
The weakness is that the cushion depends on equities and bonds moving in opposite directions. When both fall together, as happens in inflation shocks, the 40% provides no defence. In such a year a 60/40 might lose 18% while equities lose 20%, which is not much diversification at all.
Example: on $250,000, a 60/40 holds $150,000 in equities and $100,000 in bonds. A 10% equity fall and a 2% bond gain leaves $135,000 plus $102,000, a 5.2% loss. Treat 60/40 as a reference point rather than a prescription, and see risk-parity and all-weather-portfolio for alternatives.
Related: asset-allocation, risk-parity, all-weather-portfolio, diversification, rebalancing