While “anemic” returns look “downright depressing” to many, Canadian contrarian David Rosenberg has been advocating for investors to purchase long-term Treasury bonds for at least five years—and “has been mostly right.” This according to a recent article in Financial Advisor.

Since April 1, the article reports, long-term Treasurys have delivered a return of 11.9% versus 8.9% for the total stock market (as measured by the Wilshire 5000).

Rosenberg, whose view is reportedly echoed by leading-edge economists like Lacy Hunt of Hoisington Investment Management and former Merrill Lynch chief economist Gary Shilling, recently wrote a paper suggesting that the boom associated with the reopening of the economy could be short-lived and we may return to the “mediocre pace of growth experienced in the last decade.” He noted that yields on 10-year Treasurys have been falling since March, calling it a “trend” rather than a “technical move” as characterized by skeptics.

The article says that while one might expect stock market bulls to like a bond market rally—since it would render equity yields more relatively attractive—they tend to attribute the dip in bond yields to technical reasons such a “short-covering” or “repositioning.” Rosenberg, however, views it as a signal for economic weakness, adding that current inflation levels are “easily expandable, narrowly based and seeming to be very temporary” and that the coming slowdown in the economy and inflation is “already showing up in other forward-looking indicators.”

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