Bearish on bonds, cautious on stocks

CI Cambridge's Robert Swanson says neither asset class is cheap.

Sonita Horvitch 17 December, 2014 | 6:00PM
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Robert Swanson , principal and chief market strategist at Cambridge Global Asset Management, still favours equities over fixed-income securities in the Canadian asset-allocation fund for which he is responsible. "But the reality is that both these asset classes are no longer cheap." Fixed-income securities are overvalued and equities are getting expensive too, he says.

Given these valuation challenges, "we have been building our cash position in the balanced fund for some time." This cash, Swanson says, is mainly earmarked for bonds, "but we could also deploy some of it in equities if there is a significant pullback in the stock markets."

Based in Boston, Swanson says his enthusiasm for stocks over bonds has been in place since early 2009, when the equity markets bottomed. "Many stocks have rebounded strongly since and some are reaching or have reached our valuation targets."

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Sonita Horvitch

Sonita Horvitch  

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