I'm inclined to go along with the OP here.
Bonds vs Stocks have an inverse relationship. When stocks go up, bonds go down, and when stocks go down, bonds go up. However, that has not been the
case with this recession/depression.
As I talked with my Financial Advisor today, she told me this has only happend two other times. I couldn't find which two times it was, but I'd
venture a bet that one was during the Great Depression. The other, not sure about, but maybe in the late 80's or the DotCom burst in 2000.
Bonds are viewed as a "safe" investment, hence why their rates go up when there is volatility in the stock market. However, when bonds and stocks
both go down, its not a good thing, and to me, it signals that nobody is very certain about anything.
Now today, the Dow went down but both the NASDAQ and S&P 500 were up, as where bonds. You could consider this somewhat un-normal as bond prices
should probably have been down or flat, even though they were only up .04%.
I got my info off of Yahoo Finance, so you can go there for a quick glance if needed at the charts. Also there is an article as a top story: Fed Says
Recession Easing, Inflation is Tame.
finance.yahoo.com...
If this was true, bond prices would not be acting as they are. Inflation is a real concern and it is clear that the Fed is lying or not telling the
whole truth. While it is true that oil started to decline, it is already starting to inch its way back up. With oil prices going up, and oil prices
at the pump unporportional to the actual price, consumers will be hit hard. The last time oil was up, well, everyone felt the pressure of inflation.
No one should listen to Bernanke, the man is a joke; and, as Jim Cramer says, "he knows nothing".
However, on the other side, I must agree with Doc Velocitys points. If you can't stand the risk, don't be in the market. If you're afraid of
losing your money, don't get in the market....ever. Our whole system is based on risk taking; thats why people can make fortunes, or become
penniless. In a true "free-market economy" these banks and other failed business' would be allowed to just completly collapse and fade away, which
is how the system works. Unfortunatly though, we are propping up a failed ideal, that everyone can make it, which isn't true. The system has
failed, its time to scrap it and rebuild.
[edit on 24-6-2009 by ChrisJr03]