Let’s look at stock and bond correlations since 1973:
The equity/bond correlation in different periods mapped to the inflation rate at that time.
Dark blue period – 1973 to 1998. Higher inflation, stocks and bonds positively correlated.
Light blue period – 1998 to 2021. Lower inflation, stocks and bonds negatively correlated.
Red period – 2022 to now. Higher inflation again, stocks and bonds are positively correlated again. Stocks down, bonds down.
What did portfolios need? Exposure to higher rates and inflation.
We suppose that the question is what happens to interest rates and yields going forward. Is the "fight" against inflation going to happen? Can that "fight" happen? Finding the right diversifier is key.