Bonds when will they be 'normal' again?

iro

Global bonds markets are a traditional component of a portfolio, many of us have moved to cash because of the compression of yield consequent upon various large scale asset purchase programmes (and not just Sovereign debt consider GM, Freddie Mac etc).

What are the indictaors that suggest a move back to normalcy?

Which sectors (sovereign, corporate, emerging) represent the best reward with lowest risk?

Are their historical pointers that help return versus equity diviidends etc.

(N.B. any SJW style posts will be reported as 'off topic'.).

PeacefulWaters

(N.B. any SJW style posts will be reported as 'off topic'.).

Bizarre end to a "Who TF Knows" topic.

Good luck.

iro

Current S+P 500 earnings yield 1.8%

10 Year Treasury 2.4%

-60BPS

A_T

a global equity crash is needed to teach bonds how to behave properly again

iro

I think I agree, will any changes in the yield curve or emerging market spreads over Treasuries be a likely early warning? .

EarthBoy

iro wrote: »

(N.B. any SJW style posts will be reported as 'off topic'.).

Report away if it makes you feel better, but moderators won't remove posts just because they're "off topic", only if they're abusive or spam.

EarthBoy

iro wrote: »

What are the indictaors that suggest a move back to normalcy?

What's "normalcy"? Do you mean normality?

EdGasketTheSecond

Bonds are out of whack due to stupidly low interest rates, QE, and because insurers are forced to buy them no matter how bad value they are. Best avoided altogether until interest rates return to normal.

iro

EarthBoy wrote: »

What's "normalcy"? Do you mean normality?

Chosen deliberately

https://en.wikipedia.org/wiki/Return_to_normalcy

Thank you for your interest.

Voyager2002

EdGasketTheSecond wrote: »

Bonds are out of whack due to stupidly low interest rates, QE, and because insurers are forced to buy them no matter how bad value they are. Best avoided altogether until interest rates return to normal.

Do you think this is true of all corporate bonds, and of sovereign debt that is below investment grade?

I don't use bonds and don't have the time and energy to learn how to do so, but it seems plausible that the reward for taking on a degree of risk greater than that tolerated by insurance companies and the like is likely to be very great.

iro

Voyager2002 wrote: »

Do you think this is true of all corporate bonds, and of sovereign debt that is below investment grade?

I don't use bonds and don't have the time and energy to learn how to do so, but it seems plausible that the reward for taking on a degree of risk greater than that tolerated by insurance companies and the like is likely to be very great.

A good point, whereas Quantitative easing has distorted investment grade Sovereign debt hasit had any impact on emerging market debt?

Are there any IT or OEICS with a diversified exposure?