BATS:TLT   Ishares 20+ Year Treasury Bond ETF
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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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