Worst investment ideas: Long-term Treasury bonds?
Yes, you found this asset class in the "best investment ideas" category, but not everyone agrees. Stanasolovich and Ghriskey both disparage bonds. "With an accelerating, or perhaps even status quo, economy, bonds -- especially long government bonds -- are the wrong place to be," Ghriskey says.
"The economy would push up interest rates. With the economy strong, the Fed will taper (curb its bond buying), and speculation will arise that the Fed will eventually raise rates. That will certainly be a negative scenario."
"Long-term Treasury bonds will be an ugly asset class," says Stanasolovich. With current yields so low, foreign investors will stay away from the market, he says. "That's happening already."
To be sure, if the Fed lessens or ends its bond purchases, the economy will probably end up in a recession, pushing bond prices higher temporarily, Stanasolovich says. "But in the long run, as the economy stabilizes, you will see long-term Treasuries perform poorly," he says.