Fixed Income Investors May Be In For A Surprise

From The Blog of HORAN Capital Advisors
January 5, 2013 - 5:40pm

Since the financial crisis that saw the market (S&P 500 Index) bottom in March of 2009, investors have allocated more of their investment dollars to bonds versus stocks. This allocation decision has resulted in investors missing out on the much stronger returns generated by stocks. Out of the last four years only 2011 saw bonds beat stocks in the U.S. investment market.From The Blog of HORAN Capital AdvisorsThis allocation decision made by investors is confirmed by fund flow data as shown below.From The Blog of HORAN Capital AdvisorsFrom The Blog of HORAN Capital AdvisorsComplicating the analysis for investors on where to allocate investment dollars has been the Federal Reserve's involvement in artificially forcing interest rates lower through Quantitative Easing activities. Looking at the monetary base, however, it appears the Fed may have stepped away from easing recently in spite ...

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