Equity market's loss is bond market's gain

Sharp falls on global equity markets have had investors looking for potentially defensive bolt-holes, including the previously unloved bond markets.

The equity market's loss is the bond market's gain. Sharp falls on global equity markets have encouraged investors to re-appraise the outlook for volatility and look again at potentially defensive bolt-holes. Short-term investors may have been reducing equity positions and opting for cash as a temporary holding strategy and if equities rediscover their footing doubtless cash will be recommitted. Longer term investors have, in large part, opted to ride out the past week's slide on the basis that it had been well flagged in advance and represents little more in a long overdue pause for breath before share prices resume their relentless rise. Given the apparent size of the private equity pot who is to say that recent weakness might not be used as an opportunity to launch a confidence boosting mega-bid? But something else is stirring; the bond market is waking up!

Bond markets: why investors are returning

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.