I found many times they move together. Are there any evidences bonds are good buy when the stock market is dropping?
When it comes to a longer holding periods, it's a cliche, back from the days when bonds would give an interest of 10%.
In the early credit cycle bonds & stocks both go higher since lower interest rates mean easy borrowing for companies & of course lower rates mean higher bond prices. In the late cycle (which we seem to be in) bonds definitely go lower but stocks are a mixed bag. Usually in the early days of the rate rise from the Fed stocks go down but if the rates don't create a lot of slowing of the economy then stocks go up but the sector make of the stocks changes. Lower rates means tech, retail, REITs. etc. should do well but in a rising rate environment Energy & Banking do well along with stodgy companies that don't require external funding. edit: I added the following When the recession comes bonds traditionally rise since it is seen as a safe haven -- this is really only true for Sovereign Debt and not corporates. I believe however this time I'm not sure a downturn would create a lower interest rate so I have a hunch that the US dollar is actually the new Soveriegn Bond.