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Home » Blog » 2012 » 05 » Bond Rant: Why CNBC is misleading
By Lawrence G. McMillan

Bond ETF’s (IEF and TLT)  are both making all-time highs (in price).  Stock volume patterns are very strong. This is the point that all the stock market bulls (especially on CNBC) seem to miss: yes, government bonds are yielding small interest rates, but if you own them, they are rising in price as the yield falls.  In the last year, IEF (the Barclays 7 year - 10 year bond ETF) is up 15% in price, and TLT (the 20-year bond ETF) is up 35%!!! So what if they only yield 1.6% and 2.7%, respectively?  This point is rarely made on television, and as a result, they are implying that stocks are a better place to be.  This can be extremely misleading to the average retail customer...

The full Bond Rant article will be published in tonight's edition of The Option Strategist Newsletter.

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