Barron's highlights that 'stocks for the long-run' sometimes means a VERY long time (i.e. 30 years is not enough).
This hasn't been a short-term phenomenon. As Robert Kessler, head of the eponymously named Kessler Investment Advisors of Denver, points out, "perpetually maligned" 10-year Treasury zero-coupon STRIPS have outperformed both stocks (using the Standard & Poor's 500) and commodities (as measured by the GSCI total return index) over the past three, five, 10, 15 and 20 years.Chart of performance (these are total returns for each index) below:
This 30 year window has included a remarkable bond bull market and the most recent 10 year zero return stock market. But Barron's points out that while things are likely to revert back to stocks outperforming over the next 5, 10, and 20 years, there are plenty of drivers (outside of a global economic slowdown) that may cause Treasury bonds to outperform.
Bull markets in bonds, Kessler continues, last as long as 37 years. Yields peaked some 28 years ago in 1982, so they can continue to decline. Even at this relatively advanced stage of the Treasury bull market, he also points out that U.S. households' allocations to Treasuries is just 1.7%, compared to 4.6% in 1994 and 8.1% in 1952. That doesn't take into account proxies such as ETFs such as TLT, but the underweighting of Treasuries makes suggestion of a bubble less than credible.Source: Barclays Capital, GS, S&P