Saturday , 17 November 2018


Tag Archives: 10-year Treasury Bond yield

Bonds Are NOT a Safe Place to Be – Here's Why

For those who think bonds are a safe place to be, you might want to reconsider. In addition to rising sovereign risk (yes, for the U.S. as well as other countries), there is interest rate risk....[should you not] hold it to maturity. If interest rates rise, then the value of your bond falls (Bonds can produce capital gains/losses, just like stocks.) and the possibility of interest rates rising is pretty good. Words: 530

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Both Stocks and Bonds are Expensive! Here's Why

[We have determined that] the current cyclically adjusted real yield of 5.28% is telling us that the stock market is expensive, at least by historical standards. [In addition,] ...we have also determined that, relative to bonds, the real spread between stocks and bonds is 7.2% in terms of yields, i.e., stocks relative to bonds seem cheap. If stocks are expensive, and stocks relative to bonds seem cheap, this implies that bonds are also expensive. Everything is expensive! [Let me show you the math that confirms just that.] Words: 1590

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