Global View Investment Blog

Bonds vs. Stocks – What Happens Next

Since the US Federal Reserve has signaled an exit strategy, “taper” or reduce purchases, both “safe” bonds (US treasuries) and risky assets (stocks and high yield bonds), have been correcting in price. The chart below shows two periods in the last 6 years when treasury bond and stock prices have been highly correlated. The first was in early 2008 from March to July 10 year treasuries fell while stocks also fell. This also happened in the fall of 2010 when QE was announced, and both stocks and bond prices rose.

As this article suggests, the consistent message from a high correlation between stocks and bonds is that bonds rallied.

Our Volatility Control managers have held up very well in this sell off largely because of their ability to buy or sell short bonds.

Click here to read the full article.

Ken Moore

Written by Ken Moore

Ken’s focus is on investment strategy, research and analysis as well as financial planning strategy. Ken plays the lead role of our team identifying investments that fit the philosophy of the Global View approach. He is a strict adherent to Margin of Safety investment principles and has a strong belief in the power of business cycles. On a personal note, Ken was born in 1964 in Lexington Virginia, has been married since 1991. Immediately before locating to Greenville in 1997, Ken lived in New York City.

Are you on track for the future you want?

Schedule a free, no-strings-attached portfolio review today.

Talk With Us