Author and Wharton professor Jeremy Siegel says that bond investors should be very careful right now.
“Anyone that has money in bond funds has to be very cautious” of losses in both the short and long term, Siegel tells The Wall Street Journal. He says that bond buyers are preparing for yesterday’s stock market crash, the Journal reports, and leaving themselves unprepared for tomorrow’s inflation.
“Within the next five years, inflation is likely to average between 2% and 4% a year, Siegel says,” writes the Journal’s Sarah Morgan. “That’s not terribly dramatic, but it’s enough to lead to higher interest rates, which means losses for bond investors.”