Unless bonds are defaulting, their pullback is never as bad as equities, says Greg Nott, chief investment officer at Russell Investments. Speaking at the economic and market outlook session at its ‘Institutional Seminar,’ he said, in fact, the 11 per cent pullback in 1984 is just about as bad as it gets. In fact, in the U.S., the biggest drawdown back to the ’80s is four per cent. However, investors should also realize that low single bond returns are normal, it is the double digit returns of the ’80s that were an anomaly. A three per cent return is not that far off the long-term average. And rates will likely stay low for some time as the policies accommodating these rates are not changing any time soon.
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