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Howard Ward, portfolio manager of the Gamco Growth Fund, thinks anyone that owns more U.S. bonds than stocks right now is simply wrong. “Stocks are demonstrably undervalued relative to fixed income,” he told CNBC on Wednesday.“It’s a disparaity the likes of which we've never seen in this country.”
Ward’s comments come as stocks bounced back from Tuesday’s sharp decline .
“The 10-year Treasury is selling at 50 times its coupon,” said Ward. “There's no growth in the coupon.”
The 10-Year Treasury note is currently yielding 1.9 percent which, in Ward’s view, is next-to-nothing.
“With no growth in the coupon or principal, why would you want to buy that when you could buy — stocks, at 13 times earnings, that are going to have principal appreciation as well as a dividend at 2 percent,” he asked.
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