This was a good article to read if you are in Bond funds, especially longer maturities. Sounds like lots of individuals got burned in the stock market and moved to bonds setting themselves up for round 2 Good luck! LOL
"Investors like Smith have poured $982 billion into U.S. bond funds from January 2008 through August while pulling $439 billion out of equity funds...Money managers and fund executives such as Pimco's Bill Gross and BlackRock Inc. (BLK)'s Laurence D. Fink are warning that the flight to bonds leaves savers exposed to a new round of losses once interest rates rise, a risk many retail clients aren't aware of. "
I am not understanding why savers are locking in long term on these low interest rates. The only explanation I have heard is that they have to put their assets somewhere.
Sidebar: the Left likes to point out how the stock market is doing so good. Maybe it really isn't? Since bonds are paying off almost nothing, a lot of cash is being dumped into the stock market since there aren't many places to put it. This might be creating a huge bubble especially if Asia continues to show signs of slowing. Some of the P/E ratios out there are very scary!!! Make the bond rate of .008% look good!
Thomas Sowell: There are no solutions, just trade-offs.
