The 30 yr Trade

Over the last 30 years, if an investor had put their money in the S&P 500, they would have made 1.70% less than their bond (10yr treasury) counterpart. The table below shows how the 10 year has performed versus the S&P index. I do not believe this trend will continue. My solution is to invest in a basket a sovereign debt throughout the world. I would include the BRIC countries, Germany, Australia, South Africa, Thailand, one or two Middle Eastern countries and of course the United States. While I can think of many other nations that should have tremendous GDP growth, this is not a trade to call and brag about to your neighbor. The key is return OF capital. The other important issue I want readers to take away is, you could have paid no commission and slept soundly for 30 years and still beat most of the money managers on the Street. But there are no shows on CNBC about buy treasuries. Great article from WSJ discusses the misconception of long term investing.


Treasuries Outperform

zzzzzzzz10 yr TreasurieszzzzzzS&P 500zzzzzzzzAnnual Diff.

30 yrszzzzzzz9.40%zzzzzzzzzzzzz7.70%zzzzzzzzzzzzzz1.70%

10yrszzzzzzzzz6.80%zzzzzzzzzzz-3%zzzzzzzzzzzzzzzzz9.80%

5 yrszzzzzzzzzz6.20%zzzzzzzzzzz-4.80%zzzzzzzzzzzzz11%

1 yrzzzzzzzzzzzz9.70%zzzzzzzzzzz-38.30%zzzzzzzzzz 48%

Source The Leuthold Group