Category: bonds

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Quick Follow-Up to “Bonds Haven’t Been Here…”

Last week I mentioned yields on Treasuries hitting (or even exceeding) 4% now. So, let’s bring this full circle.

Two weeks ago I wrote a note titled, “No, Stocks Are Not Cheap Yet.” And in that note I provided a range of returns for the U.S. stock market over the next twelve years under a variety of good, average, and bad conditions (see below).

 

The range of returns from this analysis was -5.4% to +3.5% annualized. That means even an optimistic case for U.S. stocks (at least for the conditions in the matrix above) is about a 3.5% annualized return over the next 12-years with an average expected return of about 0%. Continue reading “Quick Follow-Up to “Bonds Haven’t Been Here…””

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Bonds Haven’t Been Here In Over A Decade (And the impact on clients’ financial projections)

Last night the U.S. 10-Year Treasury yield did something it hasn’t done since 2010… it hit 4%.

Just two years ago the 10-year was yielding a measly 0.5%! It’s certainly been a wild, parabolic move in rates.

See chart below of 10-Year Treasury Rate since the eve of the Great Financial Crisis…

Continue reading “Bonds Haven’t Been Here In Over A Decade (And the impact on clients’ financial projections)”

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First Trust: Stocks and Bonds Falling Together: What Happens Next?

Today I received a chart from First Trust with very interesting information.

The chart shows all the quarters since 1976 where stocks and bonds declined together and then provides forward return data for the subsequent 6 months, 1 year, 3 years after each event.

I’ll share the chart below then point out a couple things I find noteworthy. Click on the chart to expand…

Continue reading “First Trust: Stocks and Bonds Falling Together: What Happens Next?”

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Why We Own Treasuries

I started writing this note early yesterday before the wild market action prompted by heightened concerns about Russia potential invading Ukraine.

The purpose for the note was to address why we own Treasury bonds, especially considering that they are down simultaneously along with stocks for the year thus far and don’t seem to be providing any benefit.

Then stocks fell off a little cliff yesterday to lose about 2% on the day and Treasuries made around 1% thereby answering the question for me. Continue reading “Why We Own Treasuries”