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Stocks Follow Bonds: The Big Point

Professor Glenn A. Okun

The Rabid Capitalist: The Big Point is a brief summary of a detailed note available to paid subscribers.

The old adage that stocks follow bonds is a reliable general rule.  Bond yields offer investors an investment alternative to public equities in a competition for capital.  While the inverse relationship between bond yields and stock market valuation is readily observable, stocks can ignore bonds for appreciable periods of time.

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