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."
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