Be Prepared ForA Long Winter in Bonds

摘要

You don't need a windsock in your front yard to know that Bondland's jet stream has changed direction. For two glorious years we had the wind at our backs; bond yields went down and prices appreciated. My February column in 2010 warned of a bond fund bubble; massive amounts of money stampeded into bond funds of all types. My timing was early. The bond fund bubble got bigger and bigger. But on Nov. 3, the day after the elections, Federal Reserve Chairman Bernanke announced Quantitative Easing 2. This additional money printing was the flashpoint in the bond market On that day fixed-income investing winds changed.