Thames River multi-manager Gary Potter has warned investors to avoid jumping on the “bond bandwagon” and instead invest in equities.
Speaking to Money Marketing at the Cofunds investment forum in Hertfordshire last week, Potter (pictured) said there is currently a perception that bonds are the only place to invest due to market volatility.
He said: “Investors have been piling into corporate bonds, which have a 5 per cent yield on average, which is all right. However, over a 10-year period, the total return of corporate bonds has not returned as much as the equity markets, using the FTSE all-share.
“If you are going to beat inflation, you have missed the bond bandwagon. Investors should be investing in equities, which is where the best value is.”
Premier Wealth Management managing director Adrian Shandley says: “Gilts and corporate bonds are being seen as safer than they actually are. Equities have gone down over the last 12 years and inflation is higher than cash and so you cannot put your money in cash. The only defence against the current situation is a proper diversified asset-allocated portfolio.”