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Author: CM001 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 77229  
Subject: Re: Bond Bubble? Date: 2/7/2013 10:30 PM
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Thoughts?

The Fed QE program and world wide central banks money printing is unprecedented. So everyone is, like David Tepper said in an interview, looking at Fed for their investment direction. These are not very healthy markets and making any predictions is difficult and dangerous.

My view is, these are really, really low interest rates. How long will they sustain is not something I don't want to predict and frankly I don't care!

What I do care is when they start raising will it be gradual? Are we looking at yields raising rapidly, thus eroding the value of the assets?

If it is going to be a gradual raise, I am okay to stay invested and make adjustments as we go along. But if we expect sudden raises that is a significant risk.

In any case, I am not convinced about equity prices, because it is not clear, if and when Fed stops the QE what will happen. Most folks may not realize but we had some massive gains in equity from 2009 lows. Will equities see prices drop similar to Apple? So, the folks who bought at the 2009/2010 may still be in money but for those who are entering now, can be exposed to significant losses.

No easy answers.
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