The idea of a bond bubble keeps bubbling to the surface.

The argument is sound. Interest rates are at all time lows. In the bizarro world of bonds this means that prices are at all-time highs. Meanwhile investors spooked by the stock markets are pouring into bonds the way they poured into, well, real estate before 2008 and technology before 2000.

Interest rates really can’t go lower. So the fed is going start buying them to prop them up but eventually the next move interest rates will make will be up. The argument against a bond bubble is that with a sluggish economy that seems on the brink of swooning back into recession at every turn, the Federal Reserve is unlikely to boost interest rates anytime soon. And growth is so tepid that the need to tame inflation is a long way off.

No one can say with certainty when that tide will turn. It seems likely that the longer the economy stays fragile, and people worry about their jobs and social security, the more they will continue to pile into bonds. Will the economy give them adequate warning to when it starts to speed up? Will they/you be able to get their holdings out of bonds and back into the stock market in time for an uptick in growth and/or rates? Markets may follow some kind of logic, but investors rarely do (as you will see in November’s cover story on behavioral investing). And then there’s inertia. They inevitably act too late after they’ve sustained the pain of the bubble bursting.

There are signs of growth despite dour economic reports. For instance, so far this year the economy grew a wee bit faster than anyone though. I follow some housing reports and keep seeing that the bleeding, if not stopped, is not getting worse anymore. In some parts of the country housing is even tightening. The total number of job openings is up 32% for the year through Sept., according to the Job Openings and Labor Turnover Survey, or JOLTS report.

I can see it around me in my business as people, formerly petrified of a nonexistent job market have started leaving, while others are coming. Venture capital and merger and acquisition activity are on the rise.

It’s impossible to predict the future, but if you read between the lines, things look a lot more positive on an overall level than the media make them look. Perhaps because so often the media thrives on the negative. It’s time to start preparing your shell-shocked clients for the fact that the “safe” investment may not be so safe anymore. I know this will be a tough sell, but perhaps if you explain to them that market is turning around, that being an all bond portfolio is riskier than being in a portfolio split between stocks and bonds.