Bonds Outperform Stocks in Best Start to a Year Since 2008

Bonds beat stocks last month for the first time since August as fixed-income securities worldwide enjoyed their best start to a year since 2008. 

The start of the year in financial markets went as almost no one expected, with fixed-income assets worldwide posting their biggest January returns since 2008 and equity prices falling the most since 2010. Gold, given up for dead in 2013 as prices tumbled 28 percent, rallied.

The rally in bonds worldwide followed last year’s 0.31 percent loss, the first since 1999, according to the Bank of America Merrill Lynch Global Broad Market Index.

DYI Comments:  Despite the sub atomic low rates long term bonds are slated to out perform stocks purchased or held today for the next 10 years.  That is not saying much due to the low interest rates creating the low returns on bonds.  Stocks are far worse with an estimated average annual return around 1% to 2%.  Long term corporate bonds are in the 5% neighborhood having a chance of out performing stocks by 80% to 100% (2% stocks vs 4% bonds).  DYI's EYC Ratio (see prior post) is at a scant 0.87 indicating a terrible time to purchase stocks.

DYI