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Bonds Triple Dow Gains For The Year
But, but, but... who would buy bonds when they only yield 2%? It appears, for the 10th year in a row that the smartest people in the room have been totally and utterly wrong about the direction of interest rates.
As 2014 draws to a close with stocks at all-time highs and 1% of the nation cock-a-hoop at the wealth being created, we wondered just how many know that mid- to long-duration bonds are up around 24% year-to-date, almost triple the 8.3% gains for The Dow...
It'll be different next year though... right?
Charts: Bloomberg
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one of the biggest problems are starring us right in the face. the bond market should not out perform the stock market. red flag number 234512523
Long-term government bonds have gained 11.5 percent a year on average over the past three decades, beating the 10.8 percent increase in the S&P 500.
Silly, bonds always outperform during a depression
the power of zirp
think about 'overcrowded trades' and all that keeps coming to mind is that 'rates are going higher' meme. Everyone will get a laugh out of those foolish enough to naked short TSYs when the fed starts up QE again and ends up holding (and eventually lending) all the 'high quality' collateral available.
You're better off targeting .5-.6 on the 10 yr, which is where Japanese rates finally settled. and no rate hikes as fas as the eye can see.
Cash, Bonds, Gold...
Silly, bonds always outperform during a depression
...if you look at return on investment and ignore return of investment, that is.
Am I on ZeroHedge?
Hey thanks for not pimping that planb place again. That was getting annoying.
well.....the fed has inflated the dollar by printing. it is good to borrow, terrible to loan in inflationary times.
also, equities appear to be the first place that this extra surplus of dollars has gone. both of these support equities outperforming bonds.
(not that i've been smart enough to forsee this, i've been long pms and short sp500 too long myself....sigh.)
"terrible to loan"
this the Fed's quagmire, isn't it? not enough lending because lending is a loser's proposition in a ZIRP world. goodbye unintended consequences, hello shooting yourself in the foot thinking it will make you run faster. full of fucking idiots, the Fed is...
The banks will never again have to pay interest to borrow money, nor pay it to depositors.
We get charged interest on loans, to give money to the banks, and a huge debt to pass on to our progeny.
What a country!
Exactly. In other words, the banks will never lose money.
They hope that eventually all their profits from paying ZIRP to borrow money to buy back their stocks & paying only 1% on CD's vs charging 15% for credit card loans will offset all their losses from 2007-09 that they have buried off balance sheet or passed on to the Federal Reserve.
BOHICA
Bonds
James Bonds
All good
What ??? They're called Junk bonds, not James bonds ?
Oops, bought the wrong stuff.
Never mind.
Gary U.S. Bonds
+1000 for REAL old school.....
Who needs economists during a criminal free for all?
the purpose of inflation is to counter savers. what a system we have.
A good year for me.
Meh. Missed Tesla big time.
And Amazon, and Google, and Netflix, etc...etc...
I will say this junk became junk again this year.
Have no clue what has driven equities to the moon in just a few weeks. Race riots are deflationary. Not that I'm pro race riot...just saying. That is bullish.
More reason to cheer....
http://www.cnbc.com/id/102292271
7 year Treasury is the guiding light.
With stocks and the indieces at perpetual alll time highs, it's stands to reason that the only sellers left in the game are speculative shorts, who are getting continually crushed. I mean, if you've got a few hundred billion to play with,
just who is going to take the opposite trade each and every day?
With all the buy backs going on what makes you think there are any "opposite" sides ;)
.
Stocks fair enough, but I'm also talking about the headline indices
For Christmas, I want the trader's manual that teaches me it's good to go long the Dow, after rising 1000 points in 5 trading days... (Where can I find one)?
The rule is VERY simple:
As long as the central banks are creating money AND crushing interest rates
THEN
The HUGE IMMENSE carry trade from Japan
AND
the HUGE IMMENSE leverage in USA
AND
the absence of alternative INCOME-PRODUCING investments
Will drive equities higher, and higher, and higher ......
He's talking to you Fonz.
And the Dow is up 800% more than the average ZH reader
Partying like it is 2007!!!
The smartest people in the room ... like Long Term Capital Management.
I have been telling anybody that would listen that Bonds are the most hated bull market in history......
Luckily I listened to myself....
Nobody else would...
In the land of the blind the one-eyed man is king!
I earned almost 20% on my treasury portfolio in 2014 - YIPPPEEE !!!
How did all of you apocalypse wackos who have been believing for 6 years now in the immanent collapse of all fiat currencies, all markets, global economy and all Regimes, and who have been stuffing good money into shiny lead, make out in 2014 ???
It's not how much your portfolio went up this year. It's how much buying power you have when you cash out.
1. I cash out on each surge up, so I already seized my profit for 2014
2. My buying power = (20% more money) - (annual inflation only for the stuff I buy) = about 17% increase in buying power
How much DEcrease in buying power do the gold & silver fanatics have ?????
BONDS are BUBBLICIOUS!!!!!
and Gold and Silver down... ZH'ers portfolio sucks big !!!