Discarded: Are bonds safer than stocks?

issue discarded

Good point. Let's scrap it.

I don't get it. Bonds are clearly safer, in that, in the event of bankruptcy, the bondholders are paid before shareholders. And they're generally less volatile, because their value is pegged to a fixed income flow, instead of the more variable dividends/profits.  

That said, there's clearly a perception that bonds may not be as safe or advisable as they used to be. They are more susceptible to price swings than some people understand; and there is certainly the long term risk that they lose out to stocks, or to inflation, in the long run. But that's a different issue.

Who claims that stocks are safer than bonds?

this should be revised to Yes or No stands.  i think it's ready to be approved after that.

Chicago Tribune article:

Market pundits have been surprised in recent weeks by the strength of the stock market. But, behind the record highs on major stock indexes, an even more surprising move has occurred: a swift and mysterious collapse in bond prices and accompanying increase in bond yields.

"The bond market is more concerned about solid growth than the inflationary implications of that. The real yield is not adequate in a historical context."

Third, as real yields rise, investors will take profits from their stock market gains and reallocate to bonds, Tilton said. As that shift occurs, bond prices will rise and bond yields will fall.

Kosar sees yields moving higher later this year, but he agrees the recent move to higher rates might be overcooked.

"Once the market is expecting the trend to continue, that's typically when it turns around and bites you," he said.

Need some sample evidence to support the suggestion.  I couldn't find much up to date info.

I like:
Is the bond market eroding?

Much better :)

I'm not sure the question captures the difference between a diversified stock portfolio (or a long term stock investment, for that matter) versus the general concept of investing in singular stocks.  Plus, would there be a way to ensure comparing apples to apples (i.e. 30 year bond to holding a stock for 30 years), based on the wording of the question?  Or does that even matter...

I think the erosion point is quite interesting though.  Could we phrase the question to make that the predominant issue?  Such as: "Is the bond market eroding?"  or "Are bonds a viable investment option?"

The traditional sentiment is that the bonds are the safest security instrument for investors(hence the make up of the lifecycle funds moving bond as the end date approaches), but analysts (perhaps most notably Jim Jubak) have been touting the bond market as "rotting." Many people on both sides of the issue, those who think that bonds are still are safest investment and those who beleive that the market has moved to better prop up long term stock investment (especially in large cap).

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