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Mark Hulbert: If the stock market is irrational, what do you call the bond market?

CHAPEL HILL, N.C. — If you thought stock-market investors were irrationally exuberant, you should take a look at the behavior of those in the bond market.

To illustrate how exuberant they are, consider which of the following bonds is riskier, and therefore must pay a higher yield to compensate investors for that risk:

• A U.S. 10-year Treasury note TMUBMUSD10Y, +0.00%

• A Greek 10-year government bond

If you’re like every other sane and rational investor, you answered the latter. Yet the Greek 10-year yield recently dipped below that of the U.S. 10-year, as you can see from this chart.

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