This is a great chart we saw in the FT.

From the article:

“For decades, the 60-40 stock and bond portfolio — or something close to it — allocation model was the universal standard: capture growth with equities and offset risk with bonds…

…But since 2021, with the return of high inflation, bonds are less and less useful as a diversifier. Looking at the average risk and return across various stock/bond weightings (using annual returns for the S&P 500 and 10-year Treasury), not only has risk increased all across the board since 2021, but bond returns have been negative. In short, correlation between stocks and bonds has turned positive, meaning bonds have started contributing to equity losses, instead of offsetting them.”

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