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Globe editors have posted this research report with permission of Provisus Wealth Management. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:
Investors have long divided their assets between stocks and bonds in the belief that those asset classes counterbalance each other. One "zigs" when the other "zags". The theory of complementary asset classes is the cornerstone of investment management. However, the correlation between stocks and bonds is constantly changing and currently bond returns are less volatile than stock returns.
The only certainty is that no one can predict the future and that most of the time returns for either asset class are generated randomly of each other, except during extreme events and then history is a clear guide.
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