Buffett cited pension funds, insurance businesses and bonds as fixed income assets.
- Regarding the bond, Buffett said that the yield on 10-year US Treasury bonds has fallen 94% from the September 1981 level
- In September 1981, the yield was 15.8%, which came down to 0.93% at the end of 2020.
Veteran investor Warren Buffett believes that the future of investors investing in fixed income assets can be bleak. In a letter to shareholders of his company Berkshire Hathaway, he said that the future of those investing in fixed income assets around the world is bleak. He cited the example of pension funds, insurance businesses and bonds as fixed income assets.
Regarding bonds, he said that there are no days to invest in bonds. He said would you believe that the 10-year US Treasury Bond Yield has fallen 94% from the September 1981 level. In September 1981, the yield was 15.8%, which had come down to 0.93% at the end of 2020.
Some countries like Germany, Japan are getting negative returns on investment of sovereign bonds
Buffett said that in some countries such as Germany and Japan, investors are receiving negative returns on the millions of dollars invested in sovereign bonds. Warren Buffett is the chairman of Berkshire Hathaway. He is also known as the Oracle of Ohama. Investors around the world take every word he says seriously.
Berkshire’s insurance companies are able to invest heavily in stocks due to better cashflow
About Berkshire Hathaway, he said that the biggest contribution to the company’s business is that of property or casualty insurance. It has been Berkshire’s core business for 53 years. Berkshire’s insurance companies can safely operate on the strategy of investing heavily in stocks, thanks to the company’s financial strength and excellent cash flow from non-insurance businesses. While it is not possible for most insurance companies to follow this strategy. Those companies have to focus on bonds for reasons such as regulatory and credit ratings.
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