Articles & Insights
Financial Post  |  10 April 2015

Say bye-bye to yesterday’s bond nirvana and hello to tomorrow’s suffering

Ever since the U.S. Fed chairman Paul Volcker crushed runaway inflation in the early 1980s, conservative retirees with bond-laden portfolios have been in nirvana.

From 1982 to 2014, as inflation generally fell faster than interest rates, Canadian government bonds delivered a stupendous real (i.e., after inflation) return of 6.5% per annum – nearly three times greater than the 2.2% average since 1900. A real annual return in the magnitude of 6% to 7% is typically only available from growth-oriented investments such as equities. Read more >