In a risk event, many investors will also be selling equities to buy fixed interest investments. If the equities-to-cash analysis provides a sober assessment of the realities of market timing, the transaction component of cash-to-bonds is also worth considering.
Let us say a market portfolio has 10% cash, 30% bonds and 60% in equities. If the market wanted to increase the bond holding to 39%, it would a) need to raise cash by 1% of the portfolio to 11%, resulting in a fall in equities of 15% and a rise in bonds to 33%, and b) then reduce cash from 11% of the portfolio to 10%, by raising the allocation to bonds to 39%. All in all, stocks fall by 15% and bonds rise in price by 30%.
If cash were 10% and bonds and equities 45% each at the start, an increase in the bond allocation to 55% would see a fall in equities of 20% and a rise in bond prices of 20%. This all for a 1% shift in the cash allocation; sell equities increase cash holding by 1%, buy bonds reduce cash allocation by 1%.
If you sell towards halfway or more to the end of the market shift, and bought halfway or more to the end of the bond shift, you would end up losing money before transaction costs. Also, because only small shifts in cash need be made by existing investors, to change the bond/equity allocation, investors will automatically benefit from a rise in bond prices during this process.