Tuesday, May 8, 2012 - 6:14 AM

The Bond Market Continues To Defy Forecasts

For the past few years, we have persistently heard from the so-called experts that interest rates were sure to head much higher given the Federal Reserve's loose monetary policy.

What should savers do? The good old ladder strategy is mentioned:

A reasonable strategy for most people is to build a laddered bond portfolio of about 10 years (or use an intermediate bond fund). That balances the two risks of reinvestment and inflation.

KenBDG5,143 posts since
Nov 29, 2009
Rep Points: 116,986

1. Tuesday, May 8, 2012 - 8:07 AM

It Looks Like The Bond Market Is A 'Bubble'

The U.S. bond market surge that has pushed debt yields to record lows may constitute a “bubble,” said Robert Shiller, a Yale University economics professor who predicted the collapse of the U.S. housing market.

“I would say we’re at record low” on long-term rates, the co-creator of the S&P/Case-Shiller home-price index said today at a conference in Oslo. There has been “gradually increasing confidence in U.S. debt” in the past 30 years, he said.

http://articles.businessinsider.com/2012-01-11/markets/30615083_1_housing-bubble-dotcom-and-housing-bubbles-housing-market

Shorebreak1,284 posts since
Apr 6, 2010
Rep Points: 4,797