I usually start with a bond or stock idea, but I came across some comments about the corporate bond market in Barron’s that were so wrong and could do so much damage to a retired person looking for income in this tough income market that I had to do this first.
If you don’t already know it, bonds – almost all bonds – have run up in price and yields are at multidecade lows most of us have never seen.
Bonds have run up so much in price because of three factors: the Fed’s easy money policies, its money printing and an increasing demand from a growing population of retired folks for more secure investments. More retired persons looking for safe returns from bonds.
Up to this point the Barron’s article is on target.
But the article then quotes Moody’s Chief Economist John Lonski as having said – I hope this incorrect but I’m afraid it is accurate:
The huge demand by the growing population of retired persons is putting so much buying pressure on Treasurys and high-yield bonds, the risks posed by this high-priced market may be held at bay indefinitely.
I have news for you: Nothing is held at bay indefinitely in the markets, bond or stock. And to