I want you to look at my chart above, Bonds vs. Stocks. What I’ve done for you is offer a look at the Fourth Quarter of last year. Of note, the Fed was coming off a series of rate increases and had begun lowering rates in August. Additionally, the Republicans lost the House to Democrats in November. Talk about uncertainty in the markets.
The black bars show how bonds rallied. The blue bars show how stocks cratered.
This micro example shows you the power of counterbalancing. You have seen time after time at this website how I want you to focus on your risk first and foremost. And this is one more example of that.
Originally posted on Your Survival Guy.