What's Happening to
Bonds and Why?
Pimco's Mohamed El-Erian* provides perspective on the bond market, given that it has been under enormous pressure recently .. points out how sentiment about bonds has flipped dramatically from a favored investment class to an asset class experiencing large outflows & negative returns .. identifies how the bond market has been affected by geo-political events & changing investor sentiment .. highlights Bill Gross*'s view that investors should emphasize short maturity bonds versus long maturity bonds, also inflation-protected bonds .. "Investors should guard in particular against the potentially disruptive element of fixed income technical overshoots – meaning interest rate spikes that cannot be validated by an economic recovery, policy rate increases or sustainable asset shifts .. History is unlikely to record a change in the important role that fixed income plays over time in prudent asset allocations and diversified investment portfolios – in generating returns, reducing volatility and lowering the risk of severe capital loss."
LINK HERE to the essay
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