Siegel on the Bursting Bond Bubble, Rising Earnings
In his third quarter 2010 commentary for WisdomTree, Wharton Professor Jeremy Siegel states his expectations for the bond market "bubble" to burst "soon" and bonds' yields to rise significantly by the end of 2010.
In addition, he notes that current projections for 2011 earnings on the S&P 500 are near $94 per share, which is above the all-time high reached in 2007, when the stock index was nearly 35% higher than current levels.
While Siegel points out that many stocks have higher dividend payouts than the yields on bonds, he neglects to remind investors of the importance of total return and the dramatic differences in volatility between stocks and bonds.
Click here for Siegel's two-page commentary.