Bond Bubble Bursting?

We’ve been quite early–not necessarily relative to others, but certainly relative to the timing–on our thinking that bonds were a bubble waiting to burst.  We thought that the first time a bond fund investor sees a minus sign next to bond fund, it’s “see ya.”  With money market yields close to you-pay-us, we’ve thought that a likely place to go to is stocks, what with their ample dividend yields and decent, recent performance.

They just hit the sell button.  (This chart goes back to the beginning of 2009.)

Where they go with proceeds is anyone’s guess, but it’s pretty tough to meet retirement goals with modest interest rates and falling bond prices.

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One Response to “Bond Bubble Bursting?”

  1. Mark says:

    Apparently the Bond King is heading to preferred stocks and convertibles as the Pimco Total Return Bond fund recently announced they will be able to allocate 10% of their funds into these two asset classes.

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