Morgan Stanley grim on bond market

Here’s a grim forecast to consider: It may be 2021 before you make any money on investment-grade bonds again.

Bloomberg News reports Morgan Stanley Wealth Management’s Jonathan Mackay predicts the securities will post annual returns of between 1 percent and 2 percent for the next seven years -- which means you’ll lose money after accounting for inflation. That’s a big shift considering the debt gained 8.7 percent annually on average in the 30 years through 2012.

Investors should 'have a lower average allocation to bonds than you would have in the previous cycle because they just don’t provide the income and return,' said Mackay, senior market strategist at Morgan Stanley’s $2 trillion wealth management unit. While central-bank stimulus is supporting bond values, 'the collateral damage is going to be lower portfolio returns.'

Hit the link below to access the complete Bloomberg News article:

Morgan Stanley: Brace for Seven Years of Bond Losses

Water ETFs Are Smarter Than They Look

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News