Zeev,
" On the other hand, if the current bear market in equities brings us down to the low 6000 on the Dow in the next six month and bonds are below 5%, a case for funds stating to move back into equities could be made, thus keeping the bond rates from going to low, IMHO."
I think it was in Barrons the week before last that someone wrote that at the then current interest rates, the market was slightly undervalued according the model that the Fed [allegedly] uses to determine under- and over-valuation of equities. If so, then it must be much more undervalued at these levels (we're under 4.9% now), and a case could already be made for moving back into equities, especially given the increasing likelihood of further Fed easing, as they continue to follow the bond market's direction down. |
