I think part of the problem is established dogma (and regulatory regime) that believes bonds offer diversification from stocks. However this seems to have broken down post 2008, as they have become increasingly correlated.
Imho it's healthy to expect that market regimes change, especially since we do not operate in free market, but a semi-intervined market (where the Fed sets the price of money which is an incredibly important input to the global economy).
I also think it's important to not think of diversification in terms of asset classes anymore, but in terms of alpha source.
I know this is much harder to do because, as far as I know, only by actively trading can you isolate and quantify alpha sources like this.
I think part of the problem is established dogma (and regulatory regime) that believes bonds offer diversification from stocks. However this seems to have broken down post 2008, as they have become increasingly correlated.
Imho it's healthy to expect that market regimes change, especially since we do not operate in free market, but a semi-intervined market (where the Fed sets the price of money which is an incredibly important input to the global economy).
I also think it's important to not think of diversification in terms of asset classes anymore, but in terms of alpha source.
I know this is much harder to do because, as far as I know, only by actively trading can you isolate and quantify alpha sources like this.