From A Wealth of Common Sense:
Earlier in the year many investors were under the impression that something had to give because stocks and bonds were both rising.
I looked at the historical data on positive stock and bond returns to
show that this is more common than most investors assume:
Since performance has been so strong in both stocks and bonds during
this cycle, the chorus continues to grow for lower returns going forward
for both, something that’s not out of the realm of possibilities. This
brings up the question about how often stocks and bonds decline at the
same time to prepare for the possibility.
It’s actually extremely rare on an annual basis historically when
looking at the S&P 500 and 10 year treasuries from 1928 to 2013:
It’s only happened three times and the last occurrence was in 1969.
That’s less than 4% of all annual periods, an impressive record.
Breaking it down a little further, when we look on a quarterly basis,
stocks and bonds have fallen together more often. Going back to 1976,
using the more diversified Barclays Aggregate Bond Index, here are the
14 instances where both fell:
That means about 9% of all quarterly periods saw both go down
together....MORE
