Many investors are willing to hold long-term government bonds guaranteeing zero real return rather than buy stocks.

Judge as of 2016. True: long-term government bonds in major markets (e.g. US TIPS or Treasury real yields, Bund or JGB yields) offered about zero or negative real yields, and investors still held or bought them in large volume rather than equities, shown for example by bond fund inflows alongside equity outflows. Mostly true: real yields were near zero (within about 0.5 percentage points) or negative in some major markets, and the preference for bonds is evident. Mixed: real yields were near zero but flows did not show a clear preference for bonds over stocks, or the reverse. Mostly false: real yields were clearly positive in most major markets, so 'zero real return' is a stretch. False: long-term real yields were substantially positive and investors were favouring equities.

Set before the research began.

1. E1 GMO 3Q16 Letter: Not With A Bang But A Whimper HedgeFundAlpha (repost of GMO letter) · 8 November 2016 Own record

   “Bottom line, I suggest a 20-year flight path to get back two-thirds of the way to normal so that T-bills will yield around 1.2-1.5% real again”

2. E2 The Stock Market Is Up, but Mutual Fund Investors Are Fleeing St. Louis Fed On the Economy · 24 October 2016

   “As shown in the figure below, there were net cash outflows in U.S. domestic equity funds every month from March 2015 to August 2016.”

3. E3 The Stock Market Is Up, but Mutual Fund Investors Are Fleeing St. Louis Fed On the Economy · 24 October 2016

   “While it is difficult to pin down precisely why these outflows have been so persistent, it is clear that current conditions have made holding equity funds considerably less attractive relative to other assets.”

E3 and E4 are independent St. Louis Fed sources. They show net outflows from U.S. domestic equity mutual funds every month from March 2015 to August 2016, and they describe equity funds as less attractive relative to other assets. Neither gives any government bond yield or bond fund flow figures. E2 is the subject's own letter, and it only proposes a future path for T-bill real yields, so it does not establish what long-term real yields were in 2016. Because no evidence shows whether long-term government bonds offered about zero real yields, the core criterion cannot be checked.