Bank of America advises investors to swap bonds for commodities

Bank of America advised investors who follow a 60/40 strategy to swap bonds for commodities in their portfolios, in light of expectations of rising prices.

In a recent note according to Al Arabiya, the bank’s analysts explained that the rise in commodities is still in its infancy, as debts, fiscal deficits, demographics, deglobalization, artificial intelligence, and net-zero emissions policies are all inflationary.

The note cited annual returns since the beginning of this decade, ranging between 10% and 14% for commodities. In comparison, investors’ losses from betting on 30-year Treasury bonds have amounted to about 40% over the past four years.