The Absolute Return Letter, February 2014: Challenging the Consensus
Investors are overwhelmingly bearish on bonds going into 2014. In this month’s Absolute Return Letter we challenge that view and look at various reasons why the bond market may surprise most people and deliver a positive return this year. In no particular order, those reasons are:
- The emerging market crisis escalates further;
- The Eurozone crisis re-ignites;
- The disinflationary trend intensifies and potentially turns into deflation;
- The economic recovery currently underway proves unsustainable; and/or
- Flow of funds provides more support for bonds than anticipated.
