Reply To: Performance of Models

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Ben Bayless


To piggyback on Nate's question on why the models are currently so heavily invested in bonds during the current record breaking stock market rally, your July 1, 2013 newsletter went into great detail about why the investment models should exit the bond market completely. I realize at the time that bond prices had fallen quite a bit, but with the Federal Reserve Bank still seemingly committed to tapering, how does the bond market picture look so much better today than it did six months ago? Looking at the Vanguard Total Bond Market Index (VBTIX) and (VBMPX), the closing price on July 1, 2013 was 10.56, which was the exact closing price on Dec 31, 2013. Why are bonds so attractive again? What am I missing?