Jurrien Timmer, Fidelity Investments’ director of global macro, doubts the 60/40 portfolio is back. His chart shows the five-year stock-bond correlation still above zero at current Treasury yields.
The 60/40 portfolio, which holds 60% stocks and 40% bonds, relies on bonds rising when equities fall. Falling correlation looks favorable, yet Timmer argues higher yields keep the two moving together. As a result, 60/40 holders could have less cover.
How Does Yield Level Shape the Stock-Bond Correlation?
Timmer’s chart tracks how closely the S&P 500 and long-dated Treasuries have moved over five years. In 2013 and 2020, when yields were extremely low, the reading sank deep into negative territory. It turned positive as yields climbed.
The latest reading sits between 10% and 12%, based on data through November 2.
“With the stocks/bonds correlation coming down, does that mean the 60/40 paradigm is back? I have my doubts.”
Jurrien Timmer, Director of Global Macro at Fidelity Investments, on X
However, shorter 13-week readings fell or turned negative in the 1998 growth scare tied to hedge fund Long-Term Capital Management (LTCM). They did so again in the dot-com bust and the 2025 tariff tantrum, Timmer’s label for that year’s selloff. The five-year regime stayed positive in each case.
Are Bonds Only a Hedge When Growth Scares Hit?
Recent trading fits that pattern. Treasuries rallied during October’s AI stock selloff. The 10-year yield closed below 5% on October 22, its first time since September 22.
In contrast, Ariel Investments vice chairman Charlie Bobrinskoy argues bonds are worth buying with the 10-year yielding about 5%.
Still, inflation is the swing factor. Timmer told Morningstar in 2023 that long-run price pressures decide whether bonds can protect a 60/40 mix.
Timmer’s alternative is a 60/20/20 mix. In a May 2025 Fidelity note, he put alternatives, gold, Bitcoin (BTC), and cash in the final 20%.
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