When bonds stop protecting you
For decades, the classic 60/40 portfolio was the gold standard for balanced investing, 60% in equities for growth and 40% in bonds for stability and protection. It worked beautifully for a long time. When stocks tumbled, bonds usually rose, cushioning the blow and giving investors the confidence to ride out the storms.
That reliable negative correlation between stocks and bonds served investors extremely well from the early 1980s right through to 2021. But in 2022, the playbook changed.
That year, the 60/40 portfolio suffered its worst performance since 1937, dropping more than 20%. Stocks fell sharply as the Fed hiked rates aggressively, but bonds, which were supposed to provide shelter, fell even harder. The 10-year Treasury lost around 11% and the 30-year dropped a painful 24%. Instead of hedging risk, bonds amplified it.
Now, in the early months of 2026, I’m seeing uncomfortable echoes of that same environment. Energy prices have spiked, inflation worries are resurfacing and bonds are once again refusing to play their traditional defensive role. For a more complete summary of the story, please see the below link:
Published on: Jun 06, 2026 04:38 PM