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Great news for Stocks in 2011 "The BOND BUBBLE is Bursting"



December 13, 2010 – Comments (1) | RELATED TICKERS: TLT , QQQ , SPY

The current Bond Bubble has been called by some as the biggest bubble of All-Time.

Equity markets will be getting massive inflows in 2011 as massive outflows will continue in the bond market bubble.

The Morningstar Intermediate-Term Bond Category, the category with the largest amount of inflows this year with more than $80 billion, had $154 billion in outflows in November. Like PIMCO Total Return, this was the category's first month of net outflows in two years.

Gross said earlier this year that "bonds have seen their best days," and investors may be finally taking Gross' proclamation to heart. The rise in bond yields in recent weeks has led to sharp declines in bond funds. The 10-year Treasury note's yield increased to 2.81% from 2.63% in November.

PIMCO Total Return lost 1.5% in November alone, its worst month since September 2008. The Barclays Capital U.S. Aggregate Bond Index declined 0.57% in November.

1 Comments – Post Your Own

#1) On December 20, 2010 at 8:21 PM, checklist34 (98.59) wrote:

this would be good for stocks because the money would flow into them?  That may prove to be true, but rising rates and chaos in the bond market may rattle equitiy markets also, at least for a time.  What happened the last time, almost 60 years ago, that rates started to rise?  I haven't a clue.

Also, I would bet that this money would flow generally into dividend paying big caps, i.e., boring stocks.  My thesis for 2010 was this and it worked out pretty nicely.  Perhaps it is to continue?

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