ebook essays pieces of the puzzle
Wednesday, January 1st, 2014
three ways

14 0101 three ways

As explained in the item below, I’ve been thinking in seven-year periods lately, so I thought at the turn of the year I’d go back that far and see from where we have come.

The three lines represent long Treasuries (TLT), corporate bonds (LQD), and stocks (SPY).  I was going to use one of the big junk bond ETFs to show lower grade credit risks, but neither HYG or JNK was in existence at the end of 2006.  (Think about that.)

It is amazing that these three very different vehicles ended up on top of each other after seven years.  Within 1.27%, to be exact.

Seven years, three ways to get to the same place.  (Chart:  Bloomberg terminal.)

every seven years

“We are in the season of looking back and looking forward, prompted by the turning of a new year that reminds us of the relentless passage of time.”

Thus begins my latest essay.  It draws lessons regarding the investment arena from a very unlikely source, the Up series of films, which have documented the lives of a group of British children every seven years since 1964.