Bonds are not a good hedge if inflation is high...

60/40 can be risky too + Play inflation stock breakouts if inflation is high!

Just wanted to shoot out some important correlations:

The above basically means that if inflation is above 2.5%-3.5% bonds do not work well as a hedge for your long book. But if you long book is long inflation, then the long book hedges basically the bond exposure.

That can be seen here: A small cap value momentum strategy (which is doing well in inflatio…