A lost decade for bonds means high-quality stocks are best way to protect against inflation, says Morgan Stanley strategist

Morgan Stanley's chief U.S. equity strategist says the pandemic has initiated an inflationary boom that will last three decades, and recommends investors favor high-quality stocks over bonds for inflation protection. Implication for portfolios: tilt toward quality equities and away from duration-sensitive fixed income as bonds may underperform in a long-lasting inflationary regime.

Analysis

Morgan Stanley's chief U.S. equity strategist says the pandemic has initiated an inflationary boom that will last three decades, and recommends investors favor high-quality stocks over bonds for inflation protection. Implication for portfolios: tilt toward quality equities and away from duration-sensitive fixed income as bonds may underperform in a long-lasting inflationary regime.