“You need to go back to the late 1950s to see a situation which equities were priced as attractively as they are now relative to bonds,” she said in a Bloomberg Radio interview today with Tom Keene. “1958-1959 was a period in which investors were very concerned about the economy and the yields on many equities exceeded the yields on fixed income at that point and -- as you know -- we moved into a multi-decade bull market in equities.”
The Standard & Poor’s 500 Index (SPX) surged 26 percent through yesterday from its 2011 low on Oct. 3 as economic data beat economists’ forecasts and Federal Reserve Chairman Ben S. Bernanke said he will keep interest rates low through at least late 2014 to spur growth.
“With yields at very low levels, bonds may not be all that safe,” she said. “When yields do start to rise, as they may at some point in the future, prices go down.”