In fact, bonds at near-zero yields were primed for likely poor returns. The unpredictable thing was the bad returns came all at once. Instead of a slow bleed for a decade, balanced portfolios lost an artery.
Thus investors who’d put their money into, say, a 60/40 portfolio believing they were doing the responsible thing were blindsided when owning bonds made things even worse in 2022. Not such much a buffer as melting butter.
It might have gone differently. There are timelines were equities crashed and instead of inflation we got deflation. For instance: if governments and central banks hadn’t flooded the system with liquidity to fight the pandemic in 2020. In that case, think 1930s lost decade-style returns for equities.
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