the g spot
Why bonds are running wild
Bond yields are now so low that investors have to look elsewhere to earn a return, which is partly why equity and commodity markets have enjoyed their incredible gains of the past few months
Following last week’s drama in global bond markets in which yields slid precipitously, then rallied again, Berkshire chair Warren Buffett had this to say in his annual shareholder letter: "Fixed-income investors worldwide — whether pension funds, insurance companies or retirees — face a bleak future." Bond yields are now so low that investors have to look elsewhere to earn a return, which is partly why equity and commodity markets have enjoyed their incredible gains of the past few months. But, warned the Sage of Omaha, "some investors may try to juice the pathetic returns now available by shifting their purchases to obligations backed by shaky borrowers. Risky loans, however, are not the answer to inadequate interest rates." Why are these formerly staid markets so wild? And what does this mean for the once typical investment portfolio of 60% in equities and 40% in bonds? The FM spoke to Futuregrowth chief investment officer Andrew Canter.
What is the import of the huge swings...
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