The 30-year-plus bond bull market is reflected by this long-term chart of T-Bond yields by year-they have declined from 15.2% to 2.91%!
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Essentially, a large opportunity remains in equities as the thirty year bond bull market appears to be coming to an end.
However, in 1982 almost nobody was a bond bull.
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Momentum-chasing investors are setting themselves up for a fall he warns, if they try and extrapolate future performance from the 30-year bull run in the bond market.
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Another bull on high-yield bond funds is Jack Bowers of Fidelity Monitor, who is recommending Fidelity Strategic Income (nasdaq: FSICX - news - people ), which has 40% in high-yield debt, tempered by 60% in foreign and U.S. investment grade and government issues.
Another point that those of a more perma-bull persuasion make regarding the huge bond fund inflows over the past few years (and flows out of equities), is that investors have shifted their asset allocation from stocks to bonds at precisely the wrong time.
Stack is still a bull, despite the recent spike in bond yields.
BlackRock has thrived in recent years for two reasons it has had a particular strength in bonds during a bull market for such instruments, and the bond side of investment management seems to benefit from scale.
The bull can be traced back to 1981, when Treasury bond yields peaked at above 15%.
Also under sever pressure are those high yield corporate bonds and bond funds that are becoming increasingly oversold in bull market territory.
Equity investors have suffered through one of the most difficult decades rivaling even the Great Depression while bond investors have enjoyed a 30-year bull market.
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Minimal inflation, bond yields at 5.5% and normalized growth are the stuff bull markets are made of.
The fear now is that bonds may be nearing the end of a 30 year bull market run, and if interest rates start to rise to more normal levels, bond prices could fall quickly.
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