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Snippet on Bonds From D4L

Dividends4Life Said:

Recently I read a couple of articles in Yahoo Finance and The Wall Street Journal looking at bonds both from a historical perspective and future prospects. Here are some key points from the articles:

  • As of June 30, U.S. stocks have underperformed long-term Treasury bonds for the past 5, 10, 15, 20 and 25 years.
  • Using data from research firm Ibbotson Associates, large-company stocks have returned 9.2% annually over the past 40 years through the end of June, versus 8.5% for long-term government bonds.
  • One of the article’s author, Jason Zweig, calls into question the validity of data used in Jeremy Siegel’s book “Stocks for the Long Run”.
  • The long-playing Treasury-bond rally seems to have petered out.
  • With Washington pumping out $2 trillion in net new Treasury offerings this year, fear is growing of a vast oversupply that will send prices plummeting and yields—which move in the opposite direction—soaring.
  • Bill Gross, the head of PIMCO Total Return fund, predicts that federal debt as a share of gross domestic product, now 45%, could balloon to 300% over the next 10 years.