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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (48559)	12/31/2005 5:15:22 PM
From: Wyätt Gwyön	Respond to of 110194

That bond funds only made 1.5% has to be bad management. the 1.5% figure refers only to the Trashury component of the intermediate Lehman Aggregate index. so it has nothing to do with management as it is just whatever those particular Trashurys returned. the Intermediates had a tough time since yields rose on them most of the year, so capital losses offset part of the coupon. 5 or 10 year treasuries outperformed the DOW, the S&P, and the Naz. all of those stock indexes basically did nothing for the year, so outperforming them doesn't mean much. the point is, inflation is running 6%-plus when you adjust the figures from the Bureau of Lying Statisticians to reflect reality. so, Trashurys and stock indexes had negative real returns. as for foreign investors and their influence on artificially low interest rates, do not forget the Caribbean, which is the source of massive hedge fund buying of US Trashurys. the return-free risk trade is alive and well.