David Rosenberg: Why on earth investors would want to own bonds is a mystery to me

The plain vanilla government bond market - an asset class that in the past offered risk-free rewards - today simply provides reward-free risk, says Gluskin-Sheff chief economist David Rosenberg.

I wouldn\’t exactly classify myself like a bond bear. In the end, the world\’s major central banks have deeper pockets than I do and their incursion in to the fixed-income market has left them holding more than 30% of the outstanding sovereign debt on their balance sheets.

There is also no doubt i believe that had the U.S. Federal Reserve in its QE3 program not funded nearly half of the U.S. government’s borrowing needs, the yield on the 10-year Treasury note would be closer to 3% or even 3.5% compared to current sub-2% yield.

Be that as it might, the best opportunities globally for risk-adjusted returns still reside in the equity market where, in most cases, the dividend yield is multiples from the government bond yield.

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