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Rekenthaler Report

Today's Markets Are in Uncharted Territory

Investing when interest rates (and bond yields) are no more.


The Very, Very Long View
To write that today’s bond prices are unusual is to greatly understate the matter. In a recent interview, veteran market observer Laurence Siegel--who formerly worked in research at Ibbotson Associates and the Ford Foundation, before currently serving as director of research at the CFA Institute Research Foundation--states that current interest rates are “literally unprecedented in human history.”

Per Siegel’s sources, which date back 5,000 years (!), nominal interest rates in countries (or, for most of that history, empires) that were successful enough to be remembered have always been positive. Until the mid-19th century, they were almost always highly positive, at 8% or more. The lone exception was the height of the Roman Empire, where rates briefly hit 4%.

John Rekenthaler has a position in the following securities mentioned above: MORN. Find out about Morningstar’s editorial policies.