Abandon Stocks for Bonds? If Only Life Were So Simple.

The good news: At last, there is a worthwhile alternative to stocks. Bonds sport far more attractive yields than they have in years.

The bad news: Benchmark U.S. Treasurys have been crushed this year alongside stocks. Both the 10-year bond and the S&P 500 were down an unlucky 13% for the year up to the middle of this week, although stocks were then hit much harder by Fridays bad inflation figures than bonds were. Meanwhile junk bonds, the highest-yielding corporate bonds, bring similar exposure to a potential worsening of corporate fundamentals as shares.