FYI: First, a disclaimer. We are not suddenly pro-market timing. We have always either advocated against it, or, at the most, argued for sinning a little (meaning don’t do much of it or only do it at true extremes – and even then don’t do that much of it!). Still, whether you’re going to do anything about it or not, 1
please just view this as a posting. When something as important as the U.S. bond yield hits historical extremes, it’s worth at least a discussion, though certainly not an automatic huge short. There are also some other interesting things to examine along the way about the long-term relationships between real bond yields, real T-bill yields, the slope of the yield curve, and economic conditions.
Regards,
Ted
https://www.aqr.com/Insights/Perspectives/Bonds-Are-Frickin-Expensive
Comments
A suggested article for Cliff's next article: "Liquid-alt vehicles are always frickin expensive."