3 Dangerous Myths About Rising Bond Yields Now that interest rates are up 100% and bonds are down 20%, pundits are jumping aboard the forecast for rising yields.
But they don't understand why yields are rising—and that's the most important part of the long-term story for investors. (Most people think the rise is due to either prosperity or inflation, but it's neither.)
More than a year ago, in the face of fierce opposition from the bond bulls in the forecasting industry, leading market forecasting firm Elliott Wave International issued this to-the-point forecast:
The bull market in the bond market is aged and ripe for a reversal. Generally speaking, if you are invested in long-term debt, sell it.
– Special Report: Major Top in the Bond Market, June 2012
EWI just updated that original market-beating report with a vital four-page bulletin: 3 Dangerous Myths About Rising Bond Yields. We'll share them with you here:
Myth 1: Rising Yields Signal Inflation Myth 2: Rising Yields are a Sign of Economic Recovery Myth 3: Bond Yields Are Rising Due to the Fed's Insinuation at Tapering
Now, as you may expect, knowing about these myths isn't even half as important as knowing the realities of what's coming next. And for the investor who is prepared, the coming moves present an opportunity.
Please take a few minutes right now to understand what's really going on in bonds. It could be one of the most important investment decisions you make for years to come.
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