Equities still trading rich by most measures, but bonds have finally normalized. Yields now hovering near long-run averages — first time in years we can say that without qualification.

This matters for portfolio construction. When bonds were yielding nothing, equities had no real competition. Now? You're getting paid to wait in fixed income again. Changes the calculus entirely.

Valuation gaps like this don't persist forever. Either equities reprice lower, bonds reprice higher, or fundamentals catch up to justify current equity multiples. History says mean reversion wins more often than not.