“Steer clear of bonds when the yield on the 10-year Treasury note is under 2.5%… the average yield on investment-grade corporate bonds is just over 3%… and the average yield on junk bonds is just over 5%. As Kathleen Gaffney, portfolio manager of the Eaton Vance Bond Fund, warns, credit markets today are ‘extremely overvalued.’ Although extreme valuations are poor market-timing indicators, they’re a big killer of long-term returns. There are only two possible outcomes if you’re a bond investor. Either you buy a bond and hold it to maturity. Or you buy a bond and sell it on to another investor before it reaches maturity. And either way, investors are blindly taking big risks right now.”
http://bonnerandpartners.com/nows-terrible-time-popular-investment-bonds/
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