Buy Stocks or Bonds? The Answer Might Surprise You.

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UBS argues that with various economic forces in balance, investors now have an opportunity to reap rewards across asset classes.

The idea of a brisk bull market looked shaky at best at the start of the year, following 2022’s pain; but the rally not only persisted and gained steam, helped by somewhat cooling inflation and a healthy labor market. Now UBS argues that with various economic forces in balance, investors have an opportunity to reap rewards across asset classes.

Of course, investors who are prone to worry don’t have a shortage of fodder, from a potential government shutdown this fall to the ongoing high cost of living that’s squeezed consumers. And cash has appeal: Even with interest rates likely to moderate over the next 12 months, right now risk-free cash in high-yield savings accounts is approaching 5%.

Bonds are likely to look even more attractive as economic growth gradually decelerates . In fact, with his projected total returns of 10% to 15% for both high- and investment-grade bonds over the next six to 12 months, they are Haefele’s most preferred asset class.

 

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