2014: What a strange year for stocks, bonds

Here is the chart of the day, captured at 9:34 a.m. Eastern time:

TIP versus SPYLooking at net asset value, the TIP ETF, which holds a broad range of Treasury Inflation-Protected Securities, has performed almost exactly the same as the SPY ETF, which holds the Standard and Poors 500.

  • Net asset value for both funds is up about 5% year-to-date as of Aug. 11.
  • In addition, the TIP ETF has paid out $1.354 in dividends, an additional return of about 1.2%.
  • The SPY ETF has paid out $1.762 in dividends, an additional return of about 0.9%.

You won’t often see two remarkably different assets classes performing in lockstep for such a long period of time. I have said in a previous post that I don’t think this can continue. We should see returns breaking away, especially if stocks continue to rise.

The other possibility is that both assets classes will decline. I think the longer the trend continues upward for both, the more likely a fall for both follows.

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