Bonds RouteMap: Chart Library

The investment strategies used to predict long term government bonds in our Research Universe


All charts use the set of our hypothetical Ten Year Government Bond Indexes, which show implied changes in value at the long end of the yield spectrum as the basis for analysis. However some charts use indexes of price only, while others show total returns. See a sample chart for each investing strategy used in the Bonds RouteMap, including the complete simulated record of signals, where appropriate. Check out long-term performance simulation for market timing strategies


Momentum & Value Summary:-  This chart is designed to summarise the key action-orientated features of other bond analysis charts, omitting explanations for those who just want to see the bottom line. It incorporates both Buy & Sell signals as well as a proprietary econometric forecasting model created by PIT. For more detailed analysis, see Momentum, Inflation and Valuation charts.
  Chart Technical Analysis:- Based on the idea that the trend is your friend, this chart generates Buy & Sell signals using technical analysis. Thus signals depend only on price information available at the time. It relies on analysis of rates of change as well as moving averages. This chart is based on the observation that the psychological effect of a shock takes about a year to wear off, and is based on the Coppock Curve, together with moving average and divergence analysis.
  Investment Sentiment: - Nobody gets it always right and nobody gets it always wrong, but there is a tendency for some kinds of investor to out-perform well and others to under-perform. This strategy combines as many such indicators for each market as possible whose track record over the past decade has been proved to be effective. While individual indicators may be erratic, these composite indicators can be excellent predictors of year ahead performance.


Short Term Interest Rates:- This chart is intended to predict bond prices based on government policies, using data available at the time on monetary policy, specifically interest rates. This chart works on the assumption that governments rarely make a change in policy all at once, but spread out over a number of intermediate steps, so the effects of a change create a trend over time that investors can exploit.

Real Yield after Inflation:- This chart is intended to show the attractiveness of long-term bonds in real terms after allowing for inflation. It is designed not only to show the current position but also to provide a best guess as to the future trend. This is useful for spotting extremes of over- or under-valuation. It does so by measuring the real yield on bonds after inflation, in those countries where there is an active ten-year government bond market.


Rate of Inflation:- This chart looks at the major determinant of government bond prices in the long-term. It is designed not only to show the current position but also to provide a Best Guess as to the future trend. Given that the government bond market tends to discount inflation data when released, the main focus of attention is on the forecast period ahead. Consensus estimates are used for the forecast period.


Yield Curve:- This chart uses the yield curve to look at the relationship between consensus expectations and bond prices. It is designed not only to show the current position but also to provide a Best Guess as to the future trend. Generally, this works inversely, i.e.  the ratio of long-term bond yield to short-term interest rates is low when interest rates are expected to fall and bond prices expected to rise, and vice versa.
  Seasonal Trading Patterns:- This chart is designed to exploit short-term trading patterns, and is intended for traders, arbitrage plays over time and to assist long-term investors in fine-tuning entry and exit points. It uses end-month data to illustrate seasonal trading patterns. The chart shows the cumulative performance through the year, based on short, medium and long-term historical records.


Chronology of Events:- This high magnification chart is designed to study the significance of past events - economic, political, international or market-specific. As this chart is much larger than the screen, scroll bars enable the user to locate any point over the past quarter century to examine market action before and after the chosen event. To enhance magnification,  the financial history is divided into earlier and later periods.

Comparable charts are available for selecting Asset Classes in general and for Foreign Currencies, Stock Markets and  Investing Styles & Sectors, in particular.

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Bond Charts are part of the free international investment seminar. Just follow the classroom signs alongside, either now or come back here later when you have looked at whichever chart types in this section of the library interest you. At the end of each class, there is a sign to the beginning of the Next Class.