There Are No “Bond Kings” in This Bond Market | Pragmatic Capitalism

No bond kings

I’ve called the 30 year bull market in bonds the greatest risk adjusted bull market ever because the figures are truly amazing.

For instance, anyone who bought a 30 year T-Bond in 1985 generated about a 9% annualized return with just a 12% standard deviation. That’s 90% of the stock market’s return over the same period with just 68% of the risk.

Those days are long gone though. With overnight rates hovering just over 0% and long rates sinking ever lower the days of high bond returns are in the rear view mirror.

Sure, inflation could jump in the coming years, but we still know that current yields predict low future returns and I think there’s a mountain of evidence in support of the idea that inflation will remain historically low for much longer.  None of this bodes well for future bond returns.

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There Are No “Bond Kings” in This Bond Market | Pragmatic Capitali…

by Mike Rawson time to read: 1 min