US Investors worried about equity valuations safely reallocating to fixed income. Safely?
With 10Y US government bonds providing negative real rates, losing more than 5% in the last 12 months (same for gold), cash yielding zero, and expensive TIPS reaching a 2 standard deviations’ outperformance vs. fixed-coupon bonds year-on-year, what exactly does safely mean?
Here, we propose a simple rule to dynamically select the best US fixed income asset.
The simplest rule ever.