Tuesday, May 7, 2013

Buffett says bonds are terrible investments today

OMAHA, Neb. (AP) ? Billionaire Warren Buffett says he doesn't like owning bonds right now, and he doesn't think average investors should either.

Buffett said on CNBC on Monday that bonds are a terrible investment at the moment and owners of long-term bonds may see big losses when interest rates eventually rise.

The head of Berkshire Hathaway Inc. says stocks are generally selling for reasonable prices even with the market at record levels. Several years ago, stocks were very cheap during the recession.

Buffett says bond prices are artificially inflated because the Federal Reserve continues to buy $85 billion of bonds a month.

He says the average investor should keep enough cash to be comfortable and invest the rest in equities.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2013-05-06-US-Buffett-Bonds/id-451e1cea43b34e899f2290570677f231

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