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Disastrous Period For Bond Market Investors Ahead

By Tip TV (Nick Batsford)BondsDec 18, 2015 13:25
uk.investing.com/analysis/disastrous-period-for-bond-market-investors-ahead;-oil-%EF%BF%BD%EF%BF%BD%EF%BF%BD-the-pain-trade-5621
Disastrous Period For Bond Market Investors Ahead
By Tip TV (Nick Batsford)   |  Dec 18, 2015 13:25
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Below you find the video

Tim Price, Partner and Director of PFP Wealth Management, joined Nick Batsford on the Tip TV Finance Show to discuss the tough times ahead for the bond market, the tipping point in the credit market and the impact oil is having at low price levels.

Tough times ahead for 60/40

Price outlined that the future returns for the 60/40 balance are likely to be stretched. He continued that bond market valuations have never been higher, with some at negative yields, and so investors in some cases are actually paying money to lend to solvent governments. Price highlighted the GMO which recently provided a 7-yr asset class forecast, with this leading him to the conclusion that there are disastrous times ahead for bond market investors.

The impacts of lower oil

Price commented that the lower the Oil price goes, the more US high yield spread – Energy Sector is under pressure, and therefore he believed there is worse to come within energy and high yield areas. He continued onto Anglo American (L:AAL), which he noted as a possible turning point for the oil sector, with 85000 job losses, 2/3rds of mines being sold off and oil not being bid for at the moment. Price expressed that Russia, stock markets in the Middle East, MSCI Energy Indices and high yield indices are all feeling the effects of lower oil prices. However, the MSCI World is the outlier, and be believed this will be the next shoe to drop and has only survived on its weight on the US economy which has shown some resistance.

For further analysis on the bond and credit markets, as well as the US economy – Watch the video below.

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Disastrous Period For Bond Market Investors Ahead
 

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Disastrous Period For Bond Market Investors Ahead

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