BlackRock has analysed the inverse relationship between stocks and bonds as a part of portfolio management, providing the diversification and cushioning when interest rates move. However, recent talks of a Fed taper have led to losses both in stocks and bonds, with investors fearing the traditional relationship has been broken. The fund manager does not believe the relationship has been broken, as some of the most pessimistic commentators have suggested. However, BlackRock does believe that fixed income is heading for an inevitable loss this year, only the 3rd time this has occurred in 23 years. (VIEW LINK)
I have 13 years experience in equity markets and financial media. In 2013 I Co Founded, Livewire Markets with Tom McKay. Our vision is to be the #1 source of investment ideas in Australia. Opinions expressed are my own.