Who wrote this article?

Deepak Shenoy, Capitalmind's research team.

Cherry Picking 30 Year Bond Data?

1 Nov 2011Deepak Shenoy1 min read

Quick Facts

What is "Cherry Picking 30 Year Bond Data?" about?
What category is this article in?: Fixed Income
Who wrote this article?: Deepak Shenoy, Capitalmind's research team.
When was this article published?: Published 1 November 2011.
How long does this article take to read?: 1 min read
What topics does this article cover?: Bonds, Stocks

Bloomberg posts an article about how in the last 30 years, bonds have beaten stocks. But turn the clock back 30 years ago, and what do you find?

In 1981, the Volcker move had taken interest rates – and thus yields – to big highs. The 30 year was available at 15% yields, which means a return of 15% per year (sure, not compounded).

(Higher yields = Lower prices)

Given that, wouldn’t the 30-year bond have outperformed in any case? Equities in the US have returned around 12% compounded since then, I think. Perhaps a case of appropriately fitting data, one thinks?

In India, I don’t have enough data, but stocks have done better over the last 10-15 years.