It appears that investors are desperate for a safe haven. On Friday, yields on the 10-year Treasury dropped to 1.442 percent, the lowest level on record, and the records date back to the early 1800s, according to Reuters.With yields at historic lows, can they really fall a lot farther? According to William Irving, Co-Manager Fidelity Government Income Fund, they can.
“Given the structural problems that Europe faces and the viability of euro as a currency – we’re comfortable owning long duration Treasurys,” he says.But that doesn't mean rush into the bond market this very second. “If you look over the past few years when pessimism has been at its highest – that’s when we’ve gotten the most forceful policy responses. In turn, that’s led to relief rallies in equities and sell offs in bonds. We’re probably close to a relief rally and sell off, now," he concedes.
"However, for the long-term the trend is lower yields,” he says.
Posted by CNBC's Lee Brodie
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