Interested in some data that may shed some light on the future direction of both stock as well as bond prices?
An analysis of the relationship between the annual rate of return between long-term treasury bonds and the return of the S&P 500 index during 1999 and 2013 shows a huge inverse relationship over the period.
Specifically, when long-term government bonds have done very well, the S&P has done very poorly, and vice versa. Consistent with this, somewhat average returns for bonds corresponded to near average returns for stocks. Such a strong degree of negative correspondence between stocks and bonds could have only happened by chance one time in a thousand, according to statistics.
Since long-term bonds are doing extremely well this year, if this relationship continues to hold true in 2014, one would expect that by year's end, stocks may have lost much of their gains this year thus