Why Stocks and Bonds Are Moving in the Same Direction

The transcript discusses the changing dynamics between stocks and bonds, particularly in the context of inflation and market cycles. It explores the implications for traditional portfolio strategies like the 60/40 and risk parity portfolios, especially during periods of market volatility. The conversation highlights the challenges of relying on Treasurys for diversification and questions the sustainability of recent high returns from balanced portfolios. The discussion concludes with insights into the future of the 60/40 portfolio, emphasizing the need for realistic expectations.

In what ways might a sharp drawdown in equities prompt a bid for bonds?

Why are the risk-adjusted returns from a 60/40 portfolio over the last couple of years considered unsustainable?