Quote Of The Week: Lower Returns Ahead For Bonds

investments 2“The future for bonds is a lower-return future than investors have come to assume. Bond investors should be expecting 2% to 3% returns over the future years. … (B)ond returns will be lower than expected, but the important thing is, they’re still better than cash and will provide positive returns.”

Veteran bond investor Bill Gross, co-founder of Pacific Investment Management Co. LLC, the world’s largest bond manager with $2 trillion under management, as interviewed in Investment News, March 10, 2013

The Takeaway: Gross says he expects interest rates to rise very gradually, once the Federal Reserve stops quantitative easing, but probably not until January 2014 at the earliest. He thinks investors’ appetite for bonds will not diminish, since “the world is getting older by the day” and investors need the income and relative stability of bonds.

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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