This page highlights the benefits of a well-diversified portfolio that holds both fixed income and equities. The top chart shows the correlations between equity and sovereign bond indices. Conventional wisdom tells us that bonds and equities should typically move in opposite directions with a negative correlation, and this relationship is still true right now as we see in the top chart. Equities tend to provide higher returns but also have higher volatility, while fixed income is usually the opposite. Being overweight in only one asset class exposes investors to a scenario where a negative event could significantly drag down returns. A diversified portfolio combining multiple asset classes can help to reduce this volatility. We see this in action in the bottom chart. When we look at the period of the global financial crisis and in March 2020, we see that the 50/50 equity & bond mix had a much smaller drawdown than global equities.