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To: re3 who wrote (70692)	10/21/1999 7:24:00 AM
From: BGR	Respond to of 86076

Ike, It's just not daytraders, even institutional traders have not been doing too well lately. Just look at their financial statements of late. If indeed there is a 7% long bond sometime down the line, it is not going to be a free lunch, as inflation has to be high as well at that point (otherwise the long bond yields will be much lower). IOW, if the bond market is rational over the long run, and I think that it most certainly is, my inflation adjusted return should remain approximately constant even as nominal rates go up or down. History shows that long term, adjusted for inflation, stocks are better bets than bonds, albeit with more risk. (Now, the fact that the risk premium is going lower and lower is worrisome, I agree. But ce'st la vie, and I am not going to double guess the market. Perhaps I will switch into bonds when the risk premium is 0 or negative ... :-) I am kidding of course.) So, if I didn't switch into bonds in 1995, why now? -BGR.