¿Stocks or bonds for 2010?

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This must be one of the great questions strategists will be doing the various firms in the early new year. Peros if indeed that is the question we are doing, then you are in the wrong.

Many of the people that advertise themselves as market strategists, he is seen as one or the other. That is, or are in bonds or stocks are in and one decides based on what generates higher profitability in the future. Most of these people today say they have to be in the stock market in two aspects:

1) First I must say that the shares have gone through the worst decade in history and have lost some value for 10 years. Furthermore one can assume that such a long period such as this disastrous performance can be accompanied by a decline in future earnings. These were the patterns of last year and is very reasonable to think so.

2) Secondly I must say that the returns that are having the bonds are low, which translated into a language that investors would be "They're too expensive and overrated." Many do not think it a bad decision to invest in bonds with a return of 3% sure how they are having in mind the volatile stock market. Last year was truly amazing the amount of bonds to be bought, but you should know that usually when injected a lot of money on a specific asset performance in the long end not being desired.

Terorías all sound as good, but let me tell about another theory. Many of those who recommend buying shares today are the same as in 1999 also had recommended them the same. That is why in the nineties instead of buying bonds at low interest low tech stocks do not buy that was revolutionizing the world at that time?. The theory is that financial market had done a 25% return per year. These strategists have very compelling reasons to believe in his theory. Simply wrong a lot.

There is no way to predict the financial market with any degree of certainty. Of course we can take risks and guess what will happen, but the odds of losing everything are much larger. But the truth do not recommend this tactic for political gains and life savings. If we can not predict the future market, we can not see the stock and bond market as a set of decisions. Both generate good opportunities and costs for our portfolio, but generally revolutionize both markets. Shares provide great opportunities to generate good returns, but the cost is our exposure to heavy losses. The bonds provide income and stability change, but the cost is relatively low return rate.

If you had followed this balanced discipline in 1999 had saved our bond portfolio of the great recession of two years ago to generate a fixed income for the Webmail 10 years.

Surely today do not invest in bonds because we will surely win the action. Usually in the long term there is not overcome it. We bought it because we want a part of our money is protected. That's the main reason for buying bonds.

For this year we expect turbulence in the two markets. If the economy improves value stocks recover, foulbrood would be great for those who invest in them. While bonds will continue to have low ratios, the important thing is to have a protected part of our money. If the economy goes through a little turbulence to be reassured we have a portion of our money in bonds. I would not try to find the best returns of 2010, but what I can say is that if you apply tactics will end up being balanced in the right market