Tuesday, April 6, 2010

What Bonds Rates Are Suggesting For The Intermediate-Term

The fact that bond rates were hitting a new high along with stocks on Monday is notable. Below is a study that last appeared in the 12/23/09 Subscriber Letter that examined this.

Generally, higher interest rates make bonds a more attractive investment. This may lead people to forsake stocks in favor of lower risk returns with improved yield. Implications of this study appear to be longer-term in nature than we usually see. Traders may want to keep this study in mind in the coming weeks.

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