Bond Investors: Diversify or Lose Cash, says JP Morgan

The worst is yet to come for traditional fixed income investors, warns JP Morgan's Bill Eigen. When a bull market persists for multiple decades, it jades people’s thinking

J.P. Morgan Asset Management 13 January, 2017 | 9:40AM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Bill Eigen, manager of the JPMorgan Income Opportunity Fund, warns bond investors to get out of traditional fixed income, diversify their holdings and resist complacency as Donald Trump takes office next week.

The worst is yet to come for traditional fixed income investors. When a bull market persists for multiple decades, it jades people’s thinking. They don’t see the possibility of losing money in the asset class. Nowhere is this truer than in fixed income right now, and I hope that investors diversify before it’s too late.

There are three factors that will drive the dynamics of fixed income markets over the next cycle – rotation, the economy and the political environment. Are investors positioned opportunistically with regard to these factors, or are they going to be whipsawed by them? 

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J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.