The Year It Paid to Buy Bonds

But the rewards for collectors were mostly intangible

The markets for everything from Chinese ceramics to Government bonds last year provided a classic case study of what happens to investment values when interest rates and inflation begin to slide. Collectibles, which once glittered in the glare of rising prices, assumed a certain dowdiness, while the stock market won the spotlight as it pierced all previous tops. But the real stars were bonds.

Bonds had their best year ever. According to Salomon Brothers, the return on high-quality long-term corporate bonds was 44%, counting price appreciation...