PAYBACK TIME: Citi Warns Of A Coming Decade Of Deleveraging

The Western World is just getting started on the second of two lost decades, according to a big report by Citi’s Matt King.

While the last lost decade was characterised by boom and bust, the new one will be characterised by deleveraging and slow growth.

We haven’t even begun to erase the massive debt load from the past few decades. The UK particularly stands near the Japanese peaks of the early 1990s.

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King recommends fixed income for the best returns in the next decade. Corporate bonds could provide a better return to risk ratio, just watch out for bankruptcies.

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Interestingly another recent report from Citi Equity Strategy predicts a rebirth of the cult of equities driven by low bond yields — but that this change might not take place for another decade.

As for real estate, the combination of deleveraging plus demographics is a nightmare scenario.

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Don’t miss: A Complete Guide To Surviving A Lost Decade >

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