From this awesome article on A Wealth Of Common Sense, all we need is Potsie and Fonzie! The article draws some GREAT parallels to the current bond market and interest rate scenario we are staring down in 2015.
A line that had specific importance to us was:
“When risk strikes and stocks get hit, investors will almost certainly switch to the ‘perceived safety’ of high quality bonds.”
Bond investors are often fearful of another 1970’s type market, but with differing interest rate levels, and inflation rates, using the blueprint from the 1950’s could potentially be a much more useful tactic. In the 1950’s, with low inflation, and slowly raising rates, bond investors did not get killed in the market. This could be a good sign for bond investors in today’s market. Happy days!