No. of Recommendations: 10
Year Return Yield
1966 +2.91% 4.84%
1967 -1.58% 5.70%
1968 +3.27% 6.03%
1969 -5.01% 7.10%
1970 +16.7% 7.35%
Obviously this is too simplistic of a model to act on; but I found it interesting that it wasn't until 1970 that things actually got better in the Bond Market...Though, to be fair, those first four returns are pretty mild. Sometimes any number somewhere near zero looks not bad...
Real total return for S&P 500 1966-01-18 to 1966-10-07 = -22.7%
Real total return for S&P 500 1968-11-29 to 1970-05-26 = -38.1%
I am definitely not a fan of fixed income in general, but there are times when the likely real total return, even if modest, is likely better than the real total return from broad equities. Both are liquid, so one can choose the moment to switch back to equities. It's pretty impossible to call a bottom, but I presume it's not going to be hard to find an entry point a lot better than today's.
As an aside, the relatively nice things about fixed income that I mentioned, alluded to up-thread, was more about a safe place to hide. I was thinking about maturities maybe 1.5 years out, not 5-10 years.
Jim
