Why is anyone holding bonds? My feeling is that bonds are a clear loser. The seeds of future inflation have been sown for some time. When those seeds sprout and lead to the harvesting of an inflationary crop, is what is unknown. This is not a contrarian view, almost all experts acknowledge that bond yields must rise sometime in the future, and when they do, bond values must correct.
Yet almost all financial advisers recommend that people allocate a percentage of their portfolio to bonds, to dampen volatility. Especially for us older, retired people.
I hold no bonds, and don't plan to, anytime in the near future. There are other avenues to follow- hold a number of different asset classes, especially those which may be expected to benefit from inflation, whether mild or not.
I expect at least a mild correction from equities, they've run so strong, and there is a lot of complacency manifested in the market. But earnings are rising. Companies are so lean, that any improvement in the economy is going to the bottom line. People who are awaiting better economic news, have missed one hell of a bull market. By time, everything is lining up favorably, and the unemployment rate has fallen to below normal levels, it will be time for a rip roaring bear market.
