Oct. 31 (Bloomberg) -- The biggest bond gains in almost a decade have pushed returns on Treasuries above stocks over the past 30 years, the first time that’s happened since before the Civil War.
Long-term government bonds have gained 11.5 percent a year on average over the past three decades, beating the 10.8 percent increase in the S&P 500, said Jim Bianco, president of Bianco Research in Chicago. Investors seeking safety following the collapse of Lehman Brothers Holdings Inc. in September 2008 fueled demand for debt and upended the notion that equities rising along with corporate growth must offer the best gains.
[...] Not only have bonds knocked stocks from their perch as the dominant long-term investment, their returns proved everyone from Bill Gross to Meredith Whitney and Nassim Nicholas Taleb wrong.
“The generation-long outperformance of bonds over stocks has been the biggest investment theme that everyone has just gotten plain wrong,” Bianco said in an Oct. 26 telephone interview. “It’s such an ingrained idea in everyone’s head that such low yields should be shunned in favor of stocks, that no one wants to disrupt the idea, never mind the fact that it has been off.”
Another proof that "when it's obvious to the public, it's obviously wrong" and that inflationists are plain wrong.
That said, I do not expect the bonds to beat equities for the next 30 years. But it's still highly likely that high-quality short term bonds (are there many left?) will beat it until the end of the Greater Depression.