Comments on: Whither bond returns? http://blogs.reuters.com/felix-salmon/2013/09/13/whither-bond-returns/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: choffstein http://blogs.reuters.com/felix-salmon/2013/09/13/whither-bond-returns/comment-page-1/#comment-48158 Fri, 27 Sep 2013 01:21:25 +0000 http://blogs.reuters.com/felix-salmon/?p=22488#comment-48158 I think there are two issues at play in the fixed-income markets that make the coming years particularly interesting for asset allocators. The first is a rising rate market, the effects of which I discussed in my blog (http://blog.thinknewfound.com/a-simple- formula-to-understand-the-effects-of-ris ing-rates-on-constant-maturity-fixed-inc ome-etfs/). The second is the potential for positive correlations between equities and fixed income, which I discussed in another blog post (http://blog.thinknewfound.com/your-port folio-unhedged/).

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By: Th.M http://blogs.reuters.com/felix-salmon/2013/09/13/whither-bond-returns/comment-page-1/#comment-48094 Mon, 16 Sep 2013 14:29:18 +0000 http://blogs.reuters.com/felix-salmon/?p=22488#comment-48094 The zero lower bound is already in the prices, what matters is the trajectory of the rates, in particular how fast they will rise and how smoothly.

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By: absinthe http://blogs.reuters.com/felix-salmon/2013/09/13/whither-bond-returns/comment-page-1/#comment-48079 Fri, 13 Sep 2013 18:49:10 +0000 http://blogs.reuters.com/felix-salmon/?p=22488#comment-48079 “That leaves only the negative correlation between bonds and stocks, which is more of a short-term thing than a long-term thing (after all, both bonds and stocks should post positive returns over the long run)”

Whoa there Felix. That sentence doesn’t make sense and misses most of the point of Modern Portfolio Theory.

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By: dWj http://blogs.reuters.com/felix-salmon/2013/09/13/whither-bond-returns/comment-page-1/#comment-48078 Fri, 13 Sep 2013 17:43:15 +0000 http://blogs.reuters.com/felix-salmon/?p=22488#comment-48078 I think it’s also important to ask what happens to other asset classes that are competing for savings. If bonds generate very low returns for the next decade, are stocks going to do better? (Are bonds in other parts of the world going to do better, in dollar terms, than US bonds?) If all long-duration assets are going to be grinding lower, then (unless you have the kind of knowledge/expertise that allows you to outperform your asset classes) your only real choice is cash.

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