Bill Gross’s warning that the almost three-decade rally in fixed-income has run its course may catch individual investors off guard after they poured $89 billion into bond funds this year.
This is hardly a news flash to readers.
The prospect of a strengthening U.S. economy and rising interest rates makes an “argument to not own as many” bonds, Gross said in the interview.
Let me be clear, it will not be the prospect of a strengthening U.S. economy that sends rates higher. This is still a game of confidence towards the U.S. dollar. The U.S. dollar and US Treasury bond market are positive intertwined. Loss of confidence in one market, reinforces the loss of confidence in the other, and vice versa.
Source: businessweek.com
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