Wednesday, December 09, 2009
Are bond returns telling you to buy stocks?
You can always find a pattern in chaos as any technical analyst knows, but this chart from UBS struck me as at least a little bit interesting. Bonds have returned more than stocks over the last twenty years. Just fine. It turns out, though, that you would have done well to buy stocks on the two previous such occasions. Is that good advice today? Spin your theory in the comments.
Dude, don't you know that "past performance is no indication of future return?"
"You can always find a pattern in chaos"
Just like you can always find a face in random cracks on a wall.
In situations like this, bonds are being subsidized by Fed buying. When that ends, the returns will drop. Of course, stocks will drop as well, so there is no safe place.
Well, there's always "beans, bullets, and bandaids."