The classic investment portfolio of 60% stocks and 40% bonds is doing very well at the moment — it's risen 17% in the past year, Felix writes.

Why it matters: After more than a decade when interest rates were at or near zero, bonds provide real income again — without the volatility inherent to stocks. What's more, the capital losses involved when rates rise are now well in the past.

The big picture: Historically, one of the main reasons for a 60/40 portfolio was that stocks and bonds would provide natural hedges for each other. Stocks generally rise over time, but when they fall, that's because investors are "risk off" and seek safety — which is to say, they buy bonds.

The catch: The negative correlation between stocks and bonds — the reason why the 60/40 portfolio is considered well diversified — has been obliterated in recent years.

• Bonds and stocks both went down during the initial COVID crash, then both went up during the subsequent market rally, then both fell again when the Fed started hiking interest rates, and then both rose again when hopes were rekindled that inflation was tamed and rates would come back down.
• Effectively, stocks are increasingly being priced like bonds, with the present value of a stock calculated as its future cash flows, discounted at prevailing interest rates. When those rates go down, the value of a stock rises; when rates rise, it falls.

The other side: Just because the two asset classes are increasingly correlated, doesn't mean they don't still taste great together.

• Because rates are now high, bonds provide a healthy internal return in terms of their current yield. On top of that, if and when rates start to fall again, bonds have the capacity to generate significant capital gains.
• Meanwhile, stock-market valuations are looking stretched, which naturally reduces the rate at which stocks are going to be able to rise from here over the long term.

By the numbers: Add it all up, and U.S. bonds are expected to yield somewhere between 4.8% and 5.8% over the next decade, per Vanguard, compared to a range of 4.2% to 6.2% for stocks.

• If both bonds and stocks end up returning about 5.25% per year over the next decade, then finance theory says that bonds are the better option, because they're lower risk and therefore provide a higher risk-adjusted return.

The bottom line: Bonds won't always be this attractive, but no one is suggesting that investors move out of stocks entirely and into bonds. Instead, the idea is that a decent 40% allocation to bonds will make portfolios significantly less volatile — while still generating a healthy return.

Last month, the big law firm DLA Piper quietly cut the amount of parental leave it offers non-partner lawyers by six weeks, Emily writes.

Why it matters: Businesses almost never cut these benefits — indeed employers, especially law firms, have consistently expanded the amount of time off given to new parents for more than a decade.

• It's likely the first time a law firm slashed paid leave, writes Kathryn Rubino at Above the Law, which first reported the news.
• The cutback comes as Big Law is seeing more layoffs and a decline in hiring over the past year.

The big picture: Employers don't offer parental leave out of the goodness of their hearts.

• They do it because leave is important for recruiting and retention, particularly for women — who make up only 28% of partners at U.S. law firms. (Yet a majority of associates are now women.)
• Expanding leave is good marketing, too. For a stretch of years all a company had to do was announce an increase, and a glowing article would follow.

Zoom out: The firm's pullback could signal a broader retrenchment in some of the big work-life benefit expansions that took hold in the hot labor market of 2022.

State of play: Starting in May, DLA will offer new parents 12 weeks of parental leave — down from 18 and less than the 16-week average for most big law firms.

• But birth mothers will have more leave than everyone else. If a lawyer gives birth, they're eligible for an additional six weeks of medical leave.

What they're saying: "As a law firm, our top priority is to provide consistent, exceptional client service," said Geneva Dawn Youel, DLA's communications director, in an email.

• "To meet that goal, we need to strike a balance of providing our lawyers competitive benefits while also ensuring that the firm has proper coverage of client matters. We have done so here."

Between the lines: If the firm thinks 18 weeks of leave is a disservice to clients — what about the birth mothers who take all those weeks? Will they wind up losing out?

• It's a reasonable fear. Nearly a quarter of lawyers surveyed by Major, Lindsay in 2021 said they've faced negative consequences — lower quality assignments or fewer advancement opportunities — after taking parental leave.

"I think it's a really short-sighted approach. I think it's going to hurt them competitively in the recruiting world," says Hilarie Bass, who runs the Bass Institute for Diversity and Inclusion, and was previously co-president of Greenberg Traurig.

• And in retention: "This is absolutely the kind of thing associates leave firms over — because even if they aren't immediately impacted by the change," Rubino writes. "It shows how little the firm actually cares about their non-partner attorneys."

What to watch: So far, no other firms have followed suit — but Big Law is a lock-step world, so it's not something to rule out.