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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (48294)12/28/2005 1:23:26 PM
From: Wyätt Gwyön  Read Replies (1) of 110194
 
enormous potential for the allocation pendulum to swing all the way back to where it came from ( 70/30 can become 30/70 again )

i disagree. with the low nominal yields today, pension funds don't have any chance of meeting their mandated liabilities with superhigh bond allocations. if anything, the pension underfunding will fuel greater allocations to equities, hedge funds, etc. as is happening in the real world. now, equity markets may not comply in delivering the desired returns, but at least there is a chance. with a bond-heavy portfolio, there is ZERO chance of double digit returns. you just get return-free risk.

Heinz totally ignores all the hedge fund buying of bonds, which Contrary Investor has shown is the primary source which continues to drive the bond bubble.
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