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1/3 Here's the chart back to 1793, courtesy of Ed McQuarrie at Santa Clara. (BofA's starts in 1936.) The past 10 years through this summer have been the worst since 1803. Read that carefully. Bonds WERE the worst investment in American history. It says nothing about what they do next. 2/3 Why so bad? You buy a bond for its yield. Ten years ago, the long Treasury paid 2%. That was the ceiling, and then rates rose (price losses), taking even that away. Some perspective: in 223 years, a negative 10-year return has happened in 25 months. 24 of them are right now. The only other was Dec 1959, at -0.08%. This wasn't a normal bad decade. It was QE and zero rates. Yields lead returns by almost exactly 10 years, and now "we have a yield to observe again." h/t @grantspub and @evan_lorenz 3/3 There's a strong relationship between yield and FUTURE returns. The higher the yield, the better the return that follows. R-squared is 0.61 back to 1800 and 0.85 since 1914. Ten years ago, you were buying a 2% yield. Today it's 5.2%. History says that's worth roughly 5% a year over the next decade. Not more -2%.