Don't Yield to the Bond Bubble

The price of safety is a negative return. Why stocks and (gulp) real estate beckon

Illustration by Harry Campbell for TIME

Remember the good old days--you know, before 2008? Spirits were high, politics was less fraught, and making money was easy. We all know how that ended. Today, investors wouldn't dream of expecting double-digit returns; they just crave a safe haven--someplace to stow whatever assets and sanity they have left while they fret about the euro-zone crisis, the U.S. elections and fiscal cliff and a potential global double-dip recession.

Trouble is, the panicky flight to safety is creating a new kind of bubble, this time in the U.S. bond markets. The supply of safe assets, which historically meant AAA-rated government bonds, mortgage-backed...

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