The Goldman strategists wrote that the era of the stock market adage “There Is No Alternative” was over.
Since the global financial crisis, falling yields have enhanced the appeal of stocks, but “investors are now faced with TARA (There Are Reasonable Alternatives) with bonds appearing more attractive,” they wrote.
“How much yields have moved up, especially real yields at this point, that was very tough to see, this is what’s making us so uncomfortable,” Mueller-Glissmann said in an interview with Bloomberg TV.
“Because 150 bps we haven’t seen for a very long time, that changes the narrative from TINA to TARA,” he said. “You can go to credit to get your nominal yield with relatively little risk, you can go to the TIPS market to get your real yield with relatively little risk, so your incentive to own equities is lower.”
