Stable Value Is Better Than Bonds
Consensus forecasts continue to favor higher rates and low bond returns over the medium term. GMO, the Boston-based global investment firm, recently updated its 7-year real return forecast and projected a dire situation for most asset classes, including a projected -2.1% real return for U.S. bonds. Most investors understand the risk/return tradeoff expressed by stocks, but are not expecting a projected negative return coming from the less risky bond asset class represented by the iShares Core Total U.S. Bond Market ETF (NYSEARCA:AGG).