Yield-oriented indexes in 2013 (thru Dec. 24) – BXY is up 20.1%; Citigroup 30-yr Treasury Index is down 14.5%

FYI  Here are % changes for some yield-oriented indexes in 2013 (through Dec. 24) —

Citigroup 30-yr Treasury Index                     —   down 14.5%

BXM – CBOE S&P 500 BuyWrite Index        —   up 12.9%

BXY – CBOE S&P 500 2% OTM BuyWrite   — up 20.1%


According to the Wall Street Journal, year-to-date (through Dec. 24) the Barclays Capital Long-term Treasury Index (TR) was down 12.8% and the  Barclays Capital Aggregate Bond Index was down 2.1%.

2012 op-ed piece —

Wall Street Journal     March 22, 2012

What Does the Prudent Investor Do Now?  

In The Wall Street Journal, Princeton University economist Burton Malkiel [wrote] that at a yield of 2.25%, the 10-year U.S. Treasury is a sure loser and stocks are a safer choice.

By Burton G. Malkiel    “ …  Bonds are the worst asset class for investors. Usually thought of as the safest of investments, they are anything but safe today. At a yield of 2.25%, the 10-year U.S. Treasury note is a sure loser.  Even if the overall inflation rate is only 2.25% over the next decade, an investor who holds a 10-year Treasury until maturity will realize a zero real (after-inflation) return. If the investor sells prior to maturity, it will likely be for less than the face value of the note if the inflation rate rises. Even if the inflation rate remains moderate, interest rates are likely to rise to more normal levels as the economy continues to recover. Investors with long memories should recall that over the entire period from the 1940s until 1980, bonds were a horrible place to be. Given the likely trends, U.S. Treasurys and high quality bonds are likely to be extremely poor investments and are very risky.  …”



Yield-oriented Indexes in 2013 (through Dec. 24)