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Stocks and bonds haven't moved together like this in three decades - and that's putting portfolios at risk, says State Street

The article from MarketWatch discusses a significant shift in the financial markets where stocks and bonds are moving in tandem, a phenomenon not seen in three decades. According to State Street Global Markets, this unusual correlation is putting traditional investment portfolios at risk. Historically, bonds have served as a hedge against stock market volatility, providing stability when equities decline. However, recent market dynamics, influenced by factors like inflation expectations, monetary policy changes, and economic recovery patterns post-COVID, have led to both asset classes reacting similarly to economic news. This synchronous movement reduces the diversification benefits that investors typically rely on, potentially leading to higher portfolio volatility and risk. State Street suggests that investors might need to rethink their asset allocation strategies to mitigate these new risks.

Read the Full MarketWatch Article at:
[ https://www.marketwatch.com/story/stocks-and-bonds-havent-moved-together-like-this-in-three-decades-and-thats-putting-portfolios-at-risk-says-state-street-5b64c8d7 ]