Morgan Stanley: Brace for Seven Years of Bond Losses, just have less of your bond allocation in the perceived, or formerly perceived, safe havens of bonds

Morgan Stanley 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,

What they’re suggesting is that you just have less of your bond allocation in the perceived, or formerly perceived, safe havens of bonds

Investors have already been plowing into junk-rated debt as well as equities and less-traded assets like real estate and private equity.

http://www.bloomberg.com/news/2014-09-03/morgan-stanley-brace-for-seven-years-of-bond-losses.html?alcmpid=markets

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