Are bonds finally dead?

I haven't had an independent thought in years. However, if rates could be rushed up to about
2.5% from the present 1.5% level, the fed would be happy. So bet on this , and trust this bull will not die easy and the fed will get to that level easy as well. So, sell the rally ( what rally?)
in fed funds to ZT . I would not bet on inflation and short bonds IMO. Go with the fed. Stay away from pie in the sky hyper this or that.IMO.
 
History has proven to us that all Bull Stock Markets eventually turn into Bear Stock Markets,
and that's when Bond Markets come back into favor.
In the Bear market of 2000-2002, some Bond Funds rose 14% while the SP500 declined -50%. (Its a matter of picking smart bond funds, similar to picking good stock funds.)

Even when this last Bear Market 2008-2009 is incorporated into a 10 year period (2004-2014), some types of bonds were relatively close in comparison.

Below are the best performing market segments for the 10-year period 2004-2014, with the major bond markets and stock indices for comparison:
High Yield 7.98%
Emerging Markets 7.78%
Long-term U.S. Corporate Bonds 6.97%
Long-term U.S. Government Bonds 6.78%
Investment-Grade Corporates (all maturities) 5.49%
Barclays U.S. Aggregate Bond Index 4.62%
S&P 500 Index 8.11%

history_of_market_corrections2-hires.png
 
zdreg said:
you could be right but why do you feel this way?
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Our closest reference is Japan, followed next by Europe. Both have implemented negative rates successfully thus far. It is my concern as well as the concern of many others thats US may not raise rates high enough in time for the next recession. IMO, this limits the feds option next to perform some variation of QE and/or, learning from the success of others, attempt negative interest rates.
 
LacesOut said:
I mean it’s been a multi generational bull. Almost 40 years!
Does anyone have a big enough ego to proclaim it over?

Charts look pretty wicked.
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Silly question really...
If interest rates go up, and bonds have to be rolled over... they (the companies or countries) will just have to pay a higher rate at the start...

In the end, bonds are for a different type of investor. One that mainly looks at duration and a certain more or less fixed pay... Bonds aren't stocks... them going up and down in value, if you've invested in them for the reason they are designed for... then you shouldn't care too much about those moves. You fix a rate for a certain duration...

Bonds are never dead...

EDIT. Let me change that last thought a bit.... In an inflationary cycle... hmm, yes, bonds are kinda dead... since you'll likely lose out due to the fact that you're receiving less than real rates. But.... when everyone agrees on a certain yield curve structure, than everyone basically agrees on the projected real rates, correct? So in the end... you still get what you expected to get...

So maybe bonds are not dead, but more or less comatose...
 
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