After sustaining record losses in 2008, U.S. pension funds are unlikely to return to the high level of stock market allocations favored before the global financial crisis and will probably favor greater bond allocations, the author of a study said on Tuesday.
Unfortunately for both plan sponsors and this study's authors, they're going to get burned again. The bond market is going through its own bubble phase now; any investor reallocating heavily to fixed income (esp. Treasuries) right now is going to be very disappointed when Fed-engineered inflation rots away their returns.
Nota bene: Anthony J. Alfidi holds no bonds at this time.
