BATS:TLT   ISHARES 20+ YEAR TREASURY BOND ETF
946 5 0
7 year overlay of TLT             (20 Year US Gov't Bond ETF ) versus SPY             (the US stock market ).

The "see-saw" in the markets provides solid, if unsteady, returns from moving funds into weakness and out of strength.

This graph clearly depicts the jumpy nature of this relationship that over time and with discipline, ought to allow a disciplined investor thinking long term to make a lower-risk, balanced return.

The general outperformance of US Government Bonds over stocks is a sure sign that the going has been tough for equity markets. Over the extremely long term, the markets have rewarded the returns from risk-investing in equities .

Today's move UP in equities and move DOWN in T-Bonds is long overdue and might continue for some time. (Note: Slide the chart back to begin the overlay in 2005 and you will see that bonds are up 41%+ and stocks are up only 12%. That is a wide performance gap.

Tim

Friday, 9:47AM EST June 29, 2012
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dimes
4 years ago
So you think were pretty close to a bottom(As far as yields)? Bonds sell off yields go up following the path of equities, In a pretty big trend change, If and when it happens and I believe were close , correlations of different asset classes would change to right? I have not been trading long enough to remember the different correlations before they were so tight. Do you think these correlations of present have been the result of disinflation as well as deflationary problems? With interest rates so low and no real boost to the economy, many of the well known faces in industry have been screaming about inflation for some time. A few months back it looked like things were starting to go in that direction then yields dropped to record lows. How long do you think this can go on for and do you see correlations making big changes . If so do you see certain correlations going back to what they were before. I believe as Stocks would Rally with yields following in there foot steps.That would mean lower bond prices and it makes sense than commodities as a whole would be looking to carve a bottom soon as well.
I would really like to know your thoughts on this and if correlations are changing and tops and bottoms are starting to show signs of major trends it can be a once in a lifetime buying opportunity,looking at the euro and the direction it is going and the whole world slowing in growth, people are scared, have no where to put there money for any kind of return the safe haven seems to be in the USA but this time in form of stocks. when people started pulling there money out of Europe and stock markets across the world were following the U.S Markets were slowly inching up. In my opinion
the fear around the world is ripe as well where for the most part stocks seem to be out of favor and this psychological "socioeconomic" mood usually sets the stage. I believe I read somewhere(I think it was from Gann ) the famous phrase the bigger the bull the bigger the bear and the other way around as well. If that is the case and in most cases it is than this market has just begin it's multi year advance. I know this is sight geared towards the technical side and that being said, I expect major once in a lifetime events and cycles to change. Again sorry for the long would be question but when I think of all the fundamental aspects of the economy and look at long term chart it is hard for me not to get excited and see what things will repeat, what things will stay the same and what things will change. Thanks for your time and any response would be appreciated.
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timwest PRO
4 years ago
Since June 29th, the S&P has outperformed bonds by a nice amount (5%) and anyone who followed this chart pointing out that bonds have outperformed stocks for too long. It has taken a month for this ratio to move 5%.
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