Bonds Are Not Forever
“Public policy is to suppress interest rates and thereby transfer real wealth from savers to borrowers. Investors should respond by radically lowering their allocation to fixed income assets. If the Fed likes bonds that much, let them buy the lot”
Following the success of my first book, The Hedge Fund Mirage; The Illusion of Big Money and Why It’s Too Good To Be True, I have examined how the steady growth in debt and in financial services is likely to impact future returns. Almost every investor seeks income from their portfolio. Fixed income assets are unlikely to be the answer, as the enormous build up in debt will depress the after-inflation returns for bondholders. Bonds Are Not Forever links the debt build-up with the growth in financial services and concludes that, while bonds have been a great investment for over 30 years, their best days are behind them.
By considering history, the fallout from the credit bubble and America’s political process the reader will learn how to invest for income without using conventional fixed income since bond yields are so uncompetitive. Bonds were good for a long time, but Bonds Are Not Forever.
The manuscript is undergoing editing at John Wiley. Publication is anticipated by the end of the Summer.