Pimco Fund Manager Arnott Joins Bear Camp

Pimco's Robert Arnott, Legend Financial Advisors' Louis Stanasolovich and the editors of the influential No-Load Fund Analyst say it may be years, or even decades, before stocks return to their historic highs, making bonds more attractive investments.

After last year's stock-market crash, the long-term average returns of equities fell into the single digits. Large-company shares returned an annual average of 9.6% from 1926 through 2008, according to Ibbotson Associates. The gap to bonds has all but evaporated.

Financial advisers for years have clung to a key belief: Over the long term, stocks outdo bonds. While equities may suffer periodic slumps, they also produce tremendous growth. Now a growing minority of advisers and portfolio managers is taking a different view. ...