Bonds offer better value than stocks in Trump-era volatility, says Krishna Memani

Trump's proposed reciprocal tariffs, investors may be wise to reconsider their asset allocation strategies.

According to Krishna Memani, seasoned market strategist and fixed income expert, bonds currently offer better value than equities, especially in an environment where uncertainty is climbing and valuations are stretched.

In an interaction with ET Now, Memani advised that rather than tactically shifting between equity sectors in search of safety, investors should seriously consider fixed income. “If you have $2 to invest, you are probably better off investing in the bond market than you are in the equity market,” he said.

“Bonds are better value than stocks for the simple reason that even if you have inflationary concerns… those may end up being somewhat transitory,” Memani explained.

High equity valuations and rising uncertainty

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Memani pointed out that the primary issue with equities isn’t deteriorating fundamentals but excessive valuations.

“The challenge with the equity market is not that the overall US economy and profitability picture is bad. It is just that valuations are high and uncertainty is going higher, which does not bode well for valuation expansion,” he explained.

In such an environment, the potential for further upside in equities is limited unless markets experience a meaningful correction.

He added that this is not the kind of setup where investors should expect robust equity performance. “The outlook for stocks globally… this is not the sort of environment where things do