I would tell my clients we have had an incredible bond market rally since 1981. Bond yields are not going to go down much more, they may not go up substantially but they are not going to go to -5 percent. So, the bond market is relatively unattractive.
Does it mean that equities are much more attractive? That is far from certain because if yields on say the US 10-year treasury goes to 2.5-3 percent, that may hit back the equity markets as well.
So, I would tell the guy, look I am happy to invest your money but the returns over the next 5 or 10 years will be very disappointing to you because you expect to make between 8 and 12 percent on your portfolio every year. That is simply not going to happen.
