The 1980s band Dire Straits is famous for its hit song “Money for Nothing.” Turns out, you could have made a TON of money buying an investment that yields almost nothing in the first half of this year.
As Bloomberg recounts in this story, just buying and holding a Japanese 30-year bond returned more than 30% so far in 2016 in local currency terms. This happened despite the fact that they yield basically nothing.
But of course, central bankers won’t admit that their actions are wildly distorting asset prices and creating massive bubbles. Just like they didn’t with housing in the mid-2000s and dot-coms in the late-1990s. Sad … but true.
 By the way, don’t misinterpret this post to suggest I’m advocating “shorting” bonds here. In fact, I’ve been long the high-grade bond market for many, many months in my services because I anticipated this move. My All Weather Trader subscribers have had the opportunity to make a lot of money off of the move as a result.
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Hi Mike — I appreciate your post, but being long on bonds (in my humble opinion) is not a good idea. A diversified portfolio with equities (especially dividend stocks), cash and some precious metals seems to me the way to go. With higher interest rates looming, bonds are going to suck wind.