The following is a quote from an AP Q&A with Gus Sauter pulished in the business section of our local paper today under a "focus" heading:
While he may be technically correct, the doom & gloom tone is suprising . He also does not propose any alternatives or advice on what investors should be doing in the fixed income sector, nor anything about duration and possible eventual recovery of bond funds if interest and dividends are re-invested."Q: are bond investors facing a significant risk?
Sauter: Unfortunately, we may be seeing the bond market's version of 1999 and the run-up of tech stocks. We're building a pretty big bubble in the bond market and bubbles just don't end pleasantly. A lot of investors could be disappointed. When the economy starts to strengthen, interest rates will go back up and bond returns will be disappointing, even negative."