How does the financial services industry feel about the Fed? One asset manager told advisors this week that the Federal Reserve Bank's leaders "are feeling their way in a maze -- and they are doing it in the dark."

Michael Aronstein, a portfolio manager for Marketfield Asset Management, acknowledges that his view reflects a bias against the Fed's recent actions -- but he says the Fed moves might compel advisors to rethink the way they use bonds in a portfolio.

Speaking to an audience of advisors attending Bob Veres' Insider's Forum conference this week in Dallas, Aronstein focused on the Fed's second round of post-financial crisis stimulus measures, including the purchase of $600 billion in long-term Treasuries, and the reinvestment of an additional $250 billion to $300 billion in Treasuries from earlier proceeds. 

Those steps were "unprecedented," Aronstein says -- and they put the economy in uncharted waters, raising questions about the future value of fixed-income assets, typically considered the conservative base in a client's portfolio.

"I'm not making a dire forecast for the bond market. But I'm saying [bonds] ought to at least be considered as having more risk," Aronstein says.

His talk stirred lot of questions from advisors in the audience, who wanted to know what they should do with clients' bond asset holdings. Aronstein conceded he didn't have ready answers and even suggested commercial banks' certificates of deposit.

Miriam Rozen, a Financial Planning contributing writer, is a staff reporter at Texas Lawyer in Dallas.

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