By Dhaval Joshi, chief strategist at BCA Research
At first glance, the strategic case for owning bonds looks weak. Unlike an equity price, whose upside has no limit, the upside to a bond price does have a limit. The limit is set by the lower bound to the bond yield at, or near, zero. At this lower bound to the bond yield, it is mathematically impossible for the bond price to go any higher. Given this limit to bond prices, what is the strategic case for owning bonds? (Chart 1)
