From Financial Mentor:
What does the bond market today have in common with the stock market in 1998-2000 and the real estate market in 2006-2007?
They were all in ridiculous bubbles that ended very badly for investors.
This may sound like a bold prediction, but in fact, it's not. It is simple risk versus reward analysis based on valuations.
This simple, mathematical analysis has saved my portfolio twice from past bubbles and can save your portfolio this time.
Let's explore how it works…
Treasury Bonds Bubble Analysis
Interest rates peaked back in September 1981 and have been falling ever since to reach today's extreme lows.
According to O'Shaughnessy Asset Management, 2013 provides the most difficult environment for generating income in 140 years. Since 1871, there has never been a lower yield period in history – not even close.
The average historical yield on a 6o% equity/40% bond portfolio has averaged 4.4% and is now at an all-time low of just 2%...
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More on Treasurys:
Jim Rogers: The bear market in Treasurys could be starting now
Doc Eifrig: These investors are making a terrible mistake right now... Don't be one of them
Why a "bond investor slaughter" could be unavoidable now