For decades, investors were taught a simple framework.
Own stocks for growth.
Own bonds for protection.
When stocks fall, bonds rise. That relationship creates balance. That balance creates safety.
This idea became the foundation of the 60/40 portfolio. It shaped retirement accounts, institutional mandates, and personal financial plans across the world.
And for a long time, it worked.
From the early 2000s through the late 2010s, inflation remained low. Energy was abundant. Globalization kept costs down. Central banks responded quickly whenever markets showed signs of stress.
In that environment, the relationship between stocks and bonds was reliable. When equities struggled, bonds rallied. Losses were cushioned. Confidence was reinforced.
Over time, this pattern stopped being questioned. It became accepted as a permanent feature of markets rather than a product of a specific era.
That assumption is now being tested.
The Week the Hedge Failed