Beat the Market: Win with Proven Stock Selection and Market Timing Tools

Chapter 3 Government Bond Yields Compared to Earnings Yields

Improving Results by Adding a Second Bond-Stock Valuation Model to Your Mix

In Chapter 2, “Bond-Stock Valuation Models—A Key Market Forecasting Tool,” you examined the first of two Bond-Stock Valuation Models, which produced 27 years of positive results.

The bonds employed in the first Bond-Stock Valuation Model are the Baa corporate bonds, the lowest rank of investment-grade corporate bonds. The income instruments employed in the second model are the safest debt instruments in the United States—a combination of 90-day U.S. treasury bills, whose yields are averaged with the yields of 10-year U.S. Government Intermediate notes, both fully guaranteed by the U.S. Government. ...