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Originally Posted by kuroishinigami
Personally, I'm bearish on USD denominated fixed income currently. Due to QE these past years, sooner or later, the US treasury rate is going to be increased to curb inflation. When that happens, current yield on fixed income won't be good enough and price will go down. Sure, there is still some potential for low yield decrease in the short term, but for me the risk is too big for such a small reward so I rather put it elsewhere. This is just amateur's view though XD.
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Well here is another amateur's view; with the effect of Abenomics and China still not willing to raise rates, I see it as some form of economic warfare to see whose printer works the most efficiently.
Inflation would keep blowing out until someone is unable to tolerate the pain anymore and raises rates.
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Just out of curiousity, any reason why you don't put any weight in Emerging Market Equity/fixed income market? Those tends to give higher yield/return, although also with higher risk.
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IMO, after looking at the
marketwatch tab of rates on the right, the bond market is quite flat for the past 2 years, with little bits of volatility that would benefit speculators rather than long-term investors. I suspect that many would rather put their money into options and earn premiums instead of sitting on bonds.
As for Emerging Market Equity, I suspect the problem to be Emerging Market Debts. Considering the fact that emerging markets often have a patron currency used in its investment, the rates of bonds have failed to inspire confidence in the major investor currencies (USD, CNY for starters), therefore the invested extract less value from the investment funds to produce for the investors.
There is an opinion written on Reuters 2 months ago which
joked about the BRICs as a Bloody Ridiculous Investment Concept that is worth reading; although the ideas are hardly agreeable, due to its lack of data as compared to
this, it shares some ideas what the market MIGHT be actually doing behind our backs. Though like any other writing about investments and trading, it is a good idea to do some research into the ideas before taking a stand.
Still, there might be people putting money into the bank or dropping them on really long term investments, so the general direction might be into those sooner or later. This addiction to cheap money will kill us all.
P.S : I am a bear most of the time, so most good news seem like bull to me.