Can bonds keep beating stocks?

So much for theory. In practice, diversification is all too often a drag. Most investors know that, over the long run, stocks are their best shot at high returns. Reducing risk by diversifying sounds good, but doing so without giving up profits would require other assets with similarly stellar prospects. In fact, the main alternative to shares is bonds, which tend to yield much less. To a true Markowitzian, the hit to returns is worth it if it brings down risk by even more; for get-rich-or-die-trying types, such logic cuts no ice. Yet the latter group might be more receptive to the virtues of diversification just now. Over the past couple of months, even as stock prices have swung madly and retreated from all-time highs, bondholders have been racking up gains.