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Fink was speaking to an international group of financiers. He believes both short-end (Fed influenced) and longer term (market determined) rates are trending higher in the years ahead. He sees this as a logical response to rising inflation. Interestingly, Fink cites deglobilization (fewer imports coming into the U.S.) as one, but not the only, factor in the rising inflation at home.
Keep in mind these are broad far-reaching trends he sees and they are global in nature. Neither Fink or anyone else is forecasting what will occur in the next 3, 6, 12 or 18 months. Should we enter a recession, inflation would likely fall temporarily and rates would fall in accordance.
For many older investors bonds provide income and are an important part of their planning. What I may have suggested before is that (from a risk-reward perspective) I don’t much like rate sensitive bonds as a key portfolio component. There are exceptions. If the manager of a multi-asset, multi-strategy or moderate growth fund uses them as part of an overall investment strategy I’m fine with them. However, for individuals looking to hedge equity risk or generate income there are probably less risky alternatives, including cash.
There is a good case to be made for higher or at least not lower inflation ahead. But it is almost impossible to predict. We generals always fight the last war, and many remember the bond bloodbath in 2022 as rates shot upward. BUT rates started at a very very low point, making it almost inevitable they could not go lower. "It is different this time"
@sma, yes, thanks for the RIA links. On the second link, the one about Jones and Druckenmiller, it kinda floors me that there's a missing piece in that writeup -- no consideration of potential tariffs.
Comments
Fink was speaking to an international group of financiers. He believes both short-end (Fed influenced) and longer term (market determined) rates are trending higher in the years ahead. He sees this as a logical response to rising inflation. Interestingly, Fink cites deglobilization (fewer imports coming into the U.S.) as one, but not the only, factor in the rising inflation at home.
Keep in mind these are broad far-reaching trends he sees and they are global in nature. Neither Fink or anyone else is forecasting what will occur in the next 3, 6, 12 or 18 months. Should we enter a recession, inflation would likely fall temporarily and rates would fall in accordance.
For many older investors bonds provide income and are an important part of their planning. What I may have suggested before is that (from a risk-reward perspective) I don’t much like rate sensitive bonds as a key portfolio component. There are exceptions. If the manager of a multi-asset, multi-strategy or moderate growth fund uses them as part of an overall investment strategy I’m fine with them. However, for individuals looking to hedge equity risk or generate income there are probably less risky alternatives, including cash.
I have found the free blog from Lance Roberts ( https://realinvestmentadvice.com/) very useful. Here is his take on Bonds.
https://realinvestmentadvice.com/can-paul-tudor-jones-and-stanley-druckenmiller-be-wrong/
a Link to his daily Blog. Today he talks about Bonds, but it is usually Equities and market trends
https://realinvestmentadvice.com/will-halloween-fear-bring-november-cheer-for-bondholders/
I documented over many years so many foolish predictions. See
https://fd1000.freeforums.net/thread/13/wall-shame-worse-experts-predictions
There are better opinions how to make money real time in this site in bonds at any given time.