Do Stocks and Bonds Truly Move in Opposite Directions?

“I recently wrote about how asset allocation can reduce risk. Many financial advisors recommend an asset allocation between stocks and bonds to reduce risk, often stating that they move in opposite directions. It is important to remember that many asset classes, especially stocks and bonds, frequently move simultaneously. This means that if stocks as an asset class go down, bonds will also go down. Historically, there have been time periods where this has not been true, but in recent years it has been true. This is especially true for corporate bonds and long term bonds.