iShares Barclays Intermediate Government/Credit (AMEX:GVI)
iShares Barclays Intermediate Government/Credit Bond Fund (ETF)
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I am predicting bond will outperfrom equities for the next few years. My reasons are as follows:
The S&P is way overpriced, the P/E ratio is above the historic median.
David Rosenberg points out the S&P has priced in 4% GDP growth for 2010 while the bond market has priced in 2%.
More than 100% of the economic growth we have seen in 2009 has been the result of government spending. This cannot continue forever. If you take away government spending in 2009 real GDP would be down around 6%
While firms have been "beating" earnings estimates those estimated have been DRASTICALLY cut down over the past year.
Lastly if you look at the S&P 500 earnings have been made by cutting costs, as revenue is down. You can only cut costs (lay off people) for so long, eventually you have to sell more.
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Still think this is a bear market Rally!!
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Stock outperform bonds.
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Fixed income market is in a bubble, the yields are too low and do not reflect the reality of rising worldwide inflation. Get ready for a long term bear market in bonds
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U.S. stock bull 3/17/2008.
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Short Treasury... Should normally be safe against the S+P 500
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