US government bonds have fared much better than the US stock market since the beginning of this century. However, this trend is probably nearing an end. Admittedly, we do not expect equities to start to outperform Treasuries dramatically any time soon given the fragile outlook for global growth and the likelihood that the euro-zone crisis will deepen. But we do think the prospects for the US stock market are much brighter than for bonds over the next decade as a whole.
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