Bonds Beat Stocks: Does It Really Matter?
Chris Kimble | Jun 26, 2017 11:10AM ET
While stocks have done well this year, which would you rather have owned the past 90 days — the S&P 500 or Bond ETF ZROZ? Below looks at the performance of the S&P 500 and ZROZ over the past 90 days.
During that period, ZROZ has nearly doubled the returns of the S&P 500. Despite the S&P doing well this year to date, ZROZ has done even better, gaining around 3% more. Below looks at the Stock:Bond Ratio (SPX:ZROZ) over the past few years.
Does it matter that bonds are stronger than stocks? Do bond traders know something that stock traders don’t?
Maybe it doesn’t matter until it does. So far, bond strength of the past 90 days doesn’t seem to matter to the stock market. If the Stock:Bond ratio keeps heading south, I think it will matter, sending an important message if it does.
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