Stocks Up, Bonds Down

Here’s an interesting chart of the past few years. This shows the S&P 500 (in black), along with two long-term T-bond funds (blue and gold):

The key is to see when the two asset classes diverge. Two years ago, investors dumped stocks for the safety of Treasuries. Slightly after the top in the bond market in late 2008, stocks started to rebound in March 2009.

During much of this year, bonds did well while stocks started to languish. Recently, however, bonds have started to swoon while stocks have continued to climb. Generally, the bond market precedes the stock market by a few months.

Posted by on October 27th, 2010 at 3:03 pm


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