Bonds outperform stocks for the first 30-year period since the Civil War, but, "If you missed the rally in bonds, well, then that’s it."
More: "What the bears failed to anticipate was that Americans would continue to pare debt and boost savings." Low inflation and free money from the Fed contributed, too.
For those middle aged folks who have been contributing steadily over the years to stock-heavy retirement plans and college funds, sorry...but at least you still have the appreciated value of your home to fall back on.
When interest rates go back up, and they will, bond values will do down.
Hard to know what is safe and dependable any more...
Posted by: Craftyboro | Oct 31, 2011 at 10:22 AM
Copper...
Posted by: Billy Jones | Oct 31, 2011 at 10:46 AM
Here's the sentence right before your quote:
"The rally in bonds is a once in a millennium event, but it's absolutely mathematically impossible for bonds to get any kind of returns like this going forward whereas stock returns can repeat themselves, and are likely to outperform."
In other words, it's not middle-aged people who have the most to regret about having invested in stock-heavy portfolios. It's more elderly people who need to cash out now.
Posted by: Andrew Brod | Oct 31, 2011 at 11:40 AM