Stocks continued their run this week as investors once again embraced risk after the announcement of a preliminary European debt deal. Since September 22, the SPDR S&P 500 ETF (SPY) is up 14% while the Barclays Capital 20+ Year Treasury Bond Fund (TLT) is down 10% over the same time period.
After a steady rise through the summer, bonds have given up ground to stocks as investors react to US plans for quantitative easing. Since August 16, the Barclays Capital 20+ Year Treasury Bond Fund (TLT) has declined 10% with stocks rising 11% over the same time period.
The lackluster economy has stalled stocks and sent investors in search of safe returns. As a result, one of the best performing asset classes in recent months has been long term treasuries.