Investors are being forced to rethink a decades-old rule of thumb – that bonds will save the day if sharemarkets become too choppy – with sky-high oil prices leading to stagflation fears and stymying debt markets, pushing fund managers to seek refuge in cash and commodities instead.

A once-reliable relationship between stock market crashes and a rise in bonds has broken down amid the war between the United States and Iran, which has dragged on for more than seven weeks and shows little signs of coming to a clean resolution any time soon.

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