Bond investors have been on the rack in recent days and weeks. So much so that you have to ask why economists and professional investors continue to refer to government bonds as safe and risk-free investments, relative to supposedly riskier equities.The charge against these government IOUs is pretty damning. Take the US treasury market, regarded as the safest bolt hole on the planet. But the return on US treasuries in 2022 was minus 17.8 per cent compared with minus 18.0 per cent on stocks in the S&P 500 index. Fractionally safer, then, to the point of meaninglessness. Clearly bonds offered no diversification relative to equities.

Yes, bonds offer a contractually fixed income and, in the corporate market, rank before equities in a winding up. Yet the reality is that bonds and equities are both risky, with nuanced differences.

In 2023 so far, US equities have wiped the floor relative to bonds. This is partly illusory because the bounce in both the S&P 500 and the Nasdaq indices has been driven almost exclusively by the seven biggest technology companies. Quite a turnaround.