Published Wed, 12 Jun 2019 09:00:00 -0400 on Seeking Alpha
Sanford C. Bernstein & Company Analysts (January 2017)
“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria”
Sir John Templeton
“Life and investing are long ballgames.”
I have been bearish on bonds since 2016, expecting higher long-term bond yields, and after a promising start in 2016, this has been a difficult trade, as the lower for longer narrative has continued to gain traction, remarkably almost 40 years into the current bond bull market, and even with the S&P 500 Index, as measured by the SPDR S&P 500 ETF (SPY), up over 275% over the past decade.
During this time frame, meaning the past ten years, the iShares 20+Year Treasury Bond ETF (TLT) has actually risen a little over 100%, a somewhat surprising development considering the elevated level of bond prices following the Great Financial Crisis that spanned 2007-2009.
Bond prices and stock prices are rising together, in my opinion, because the U.S. stock market has become more yield-oriented than ever, so lower bond yields help a current dominant driver of the stock market, where many investors - institutional and retail - are focused on dividend yield, as they have been pushed out of the risk curve ever since central banks brought short-term policy rates to near zero levels.
Adding to the narrative, we cannot forget that the large-cap technology stocks like Amazon (AMZN), Facebook (FB), Alphabet... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|SPDR S&P 500 ETF||301.29||0.0||0.00||5.42||1.82|
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