Bank of America strategists have issued a stark warning to investors, highlighting a scarcity of viable defensive positions in current market conditions.
The bank’s research team argues that traditional safe havens are losing their efficacy, leaving portfolios exposed to a widening array of macroeconomic and geopolitical risks.
The core of the analysis suggests that investors "can't buy bonds, can't sell stocks" as a reliable hedge.
This reflects a breakdown in the historical negative correlation between equities and fixed income, a dynamic that has complicated risk management for institutional and retail investors alike.
With bond yields remaining elevated and equity valuations stretched, the usual tools for preserving capital are proving less effective.
This assessment aligns with broader concerns about market fragility.