Amid Deflation, Pros Turn to Bonds
By Jeff Cox, CNBC.com Staff Writer
With investment advisors convinced the economy may be headed for a bout of deflation, they're turning to longer-term bonds for safety.
The uncertainty of the current environment creates a complicated picture for investors, but many advisors continue to feel comfortable with the safety of bonds, particularly those from the U.S. government and for a longer duration.
It's part of a mindset that believes inflation could well be the economy's long-term worry -- going out two, three or four years from now -- but in the near term prices could turn negative and bring about deflation.
"It's hard to see where the inflation is going to come from," says Brian Nick, investment strategist for Barclays Wealth in New York. "The longer-duration bonds look expensive but also look like stable, safe assets."
More from CNBC
Wheat Soars, Rogers Sees 'Much Higher' Food Prices
RIM Unwraps New iPhone Rival: Blackberry Torch
The 10 Favorite Cars for Thieves
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV