The consensus script is that when stocks fall bonds go up, instead 2022 saw that consensus view blown apart as the below chart illustrates. In fact bonds have NEVER under performed stocks during a downturn, not even during the raging inflation of the 1970's!

US bonds are down 50% form their all time, 15% year to date! Of course now with the benefit of hindsight all are pointing the finger at INFLATION which apparently turned out NOT to be transitory, much as I was warning a year ago when bonds were trading 50% higher in price (Protect Your Wealth From PERMANENT Transitory Inflation ).

I have never been much of an investor in bonds i.e. the only bond I hold is the UK 2030 4 1/4 index linked gilt, but I am definitely perking up to the prospects of deploying at least some of my cash into the decimated US and UK bond markets at some point. In terms of target exposure I doubt it will exceed 5% from the current 1% of portfolio, I am just not that much of a bond investor, not enough upside but do recognise there is an opportunity brewing in the not too distant future when bonds trade to new bear market lows.

This article is an excerpt form my extensive analysis that concludes in detailed stock market trend forecast into the end of 2023 Stocks Bear Market Max PAIN - Trend Forecast Analysis to Dec 2023 - Part1 was was first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

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Your watching the British pound burn at the official rate of 10.1% per annum analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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