“This is the story for the next five years,” said Weiss’s Jordi Visser, on the move from stocks to bonds.
From inflation to a potential recession, a number of complex factors are pushing allocators to rejigger their portfolios next year. But there’s also one simple reason for the move: Yields on almost risk-free government bonds are more than 4 percent, a level that seems magical compared to what’s been available — that is, almost zero — in recent years.
For investors, that means they finally have an alternative to holding so much of their portfolios in stocks — and obviously with far less risk.
The movement of money from stocks to fixed income may end up having profound consequences for the capital markets and the asset management industry. Continue reading...