Two Thoughts As 2012 Winds Down

Here are two things that have been on my mind as the year winds down.

I’m curious if the March 2009 low in the S&P 500, now nearly four years old, marked the end of the brutal nine-year bear market that began in March 2000. That, of course, was the capstone of an 18-year bull market that began in 1982.

If so, it’s interesting that the bear run was about half the time of the bull run. We never know these things until a few years after they happen. I suspect that it was the low.

The other item on my mind is, did the bond market’s peak this past July of this year mark the end of its 31-year run? On July 25, 2012, the yield on the three-, five-, seven-, ten-, twenty- and thirty-year Treasuries all hit their lows. This was right at the time of Mario Draghi’s “whatever it takes” pledge.

Yields have risen since then but every prediction of the bond market’s demise — and there have been many — has been wrong. I’m fairly certain that stocks hit their low, but I’m not so sure about bonds.

Posted by on December 31st, 2012 at 11:45 am

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