Secret Agent Bond
Prospects for 2026 (Part 4): Spectre of A Contrarian Call
In bull markets investors see only positive structural trends; in bear markets they are unexpectedly skewered by downward cycles. There are clear trends in markets today, but we fear that they will get temporarily derailed by a nasty down-cycle as liquidity tightens in 2026. This makes us (temporarily) more persuaded by the merits of government bonds.
This is the fourth part of our asset allocation views ‘Prospects for 2026’. It should be read alongside Parts #1 (Asset Allocation Overview), #2 (Regional Liquidity Cycles) and #3 (US Dollar).
