Is the bond market the next bubble to burst?

Government bond yields are at near-record lows as prices have surged. So is the bond market the latest bubble or are investors right to price in a gloomy future for the economy? James Ferguson and Dr Peter Warburton discuss whether it's time to bail out of bonds.

Should you buy into the bond rally? Yes, says James Ferguson, there's plenty of upside left. But Dr Peter Warburton argues we're in a bubble - and it's time to sell.

Is the bond market rally a bubble? No. A bubble occurs when an investment story, which starts off with sound economic fundamentals behind it, develops its own momentum and, after a while, its own set of justifications for existing usually along the 'this time it's different' line.

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James Ferguson qualified with an MA (Hons) in economics from Edinburgh University in 1985. For the last 21 years he has had a high-powered career in institutional stock broking, specialising in equities, working for Nomura, Robert Fleming, SBC Warburg, Dresdner Kleinwort Wasserstein and Mitsubishi Securities.