Tuesday, May 29, 2012

Bond Market: Buy or Bubble

Bond Market: Buy or Bubble

I was on Fox Business News on Friday to debate whether or not the bond market is a buy or in a bubble.  At the end of the day it all depends on your time frame.  Short term, bonds are in an uptrend so if you are a tactical money manager, which we are, you want to invest with the trend.  However, when/if Europe gets its act together and the Fed stops manipulating rates that trend could change in a big way.  I do believe that eventually shorting longer term treasury bonds will be the trade of the decade. 

If you are a long term, buy and hold, investor (which you shouldn't be) then I wouldn't touch bonds with a 10 foot pole, too much risk for so little return.  If you want safety go to cash.  Buying long term treasuries at this point is like trying to pick up pennies in front of a steamroller.

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