Don Lair
3 min read
Quick Read
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SPDR S&P 500 ETF (SPY) has returned 261% over the past 10 years and 27% in the trailing year, but sequence risk means a market drawdown in year four wipes out the value of needing money for a planned purchase in five years. With 30-year Treasuries yielding 5.03% and investment-grade corporate bonds approaching 6.5% to 7.5%, bonds now offer risk-adjusted returns that rival historical equity returns without requiring market cooperation.
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Bond yields have narrowed the gap with expected stock returns to historically tight levels, making fixed income a serious weight against equities for investors with defined time horizons and planned purchases rather than 20+ year horizons.
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The analyst who called NVIDIA in 2010 just named his top 10 stocks and SPDR S&P 500 ETF wasn’t one of them. Get them here FREE.
Every investor eventually faces the same question: when does the certainty of a bond beat the upside of a stock? Evan from the Investing for Beginners Podcast laid out a clean answer, and the math right now is closer than most people realize.
On a recent episode, Evan said, “if I was able to get, you know, 6.5%, 7%, 7.5% off of a bond, that’s creeping pretty dang close to something like an expected market return.” That is the whole thesis in one sentence. When a guaranteed coupon starts approaching what equities have historically delivered, the risk-adjusted choice gets interesting fast.
Where yields actually sit today
We are not at 7% yet, but the curve is climbing. As of May 12, 2026, the 30-year Treasury yields 5.03% and the 20-year yields 5.02%. The 10-year sits at 4.42%, in the 87th percentile of its 12-month range. Investment-grade corporates layer a spread on top, which is how Evan’s 6.5% to 7.5% scenarios start to materialize.
The analyst who called NVIDIA in 2010 just named his top 10 stocks and SPDR S&P 500 ETF wasn’t one of them. Get them here FREE.
Inflation is cooperating. April CPI came in at 332.4, with the Fed funds upper bound holding at 3.75% since December 12, 2025. Real yields on 30-year TIPS are running at 2.74%, meaning long bonds are paying genuine purchasing power, not just inflation offsets.
The certainty premium
SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has returned 261% over the past 10 years and 27% in the trailing year. Stocks have crushed bonds. The catch is sequence risk. If you need money in five years for a house down payment, an average return means nothing when the drawdown shows up in year four. The VIX at 18.38 is reminding everyone that calm markets do not stay calm.
