The can has been kicked down the road several times but it feels like the end of the road is in sight.
Many investors buy individual bonds as a means to preserve their wealth. They can serve as a method to balance growth assets (such as stocks).
We did an internal survey among our associates, attempting to get a feel for their views on various economic and fixed income topics. Any survey result concerning the future can net inexact results but nonetheless reveal general sentiment. Attitude, outlook, and opinions can help shape the market.
A lot was going on with rates in 2023, yet, at the end of the year how different were things? The 10-year Treasury yield's lowest closing was 3.30%, while its highest close was 4.98%.
The market has been indecisive but with reason. 2023 has been filled with strong opinions however, many of the opinions are of contrasting beliefs. Reading the future is not easy.
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
The financial markets, investor opinions, and world events have been all over the place – so bear with me this morning as I am going all over the place with a variety of year-to-date observations and comments.
The 2- through 30-year Treasuries rallied hard to drop yields from 12 to 18 basis points. By example, the 10-year Treasury price bottomed out at $91.86 (4.93%) and peaked at $95.25 (4.48%). This is a 3.4-point price swing or 45 basis point drop in yield.
Higher for longer. The Federal Reserve will likely maintain higher interest rates and remain open to another rate hike. Borrowing costs for households, businesses and governments have risen with soaring rates.
I was asked a pretty good question following an internal meeting late last week. The question started out by noting that we have been promoting going longer on the curve for a while now and then asking why we think longer-term rates will come down.
As a strategist, I work with financial advisors every day creating custom fixed income portfolios based on client’s financial needs and goals – with a keen eye on the importance of a balanced portfolio.
When the media speaks of the yield curve, they are likely referring to the Treasury yield curve. It is the point of reference for interest rate levels and investment comparison.
Inverted curves (when the gold line goes below the red line meaning that short maturity yields are higher compared to longer maturity yields) have preceded recessions.
In general, portfolios can be split into growth assets and principal protecting assets. Growth assets tend to have greater risk coupled with greater income/reward.
Sometimes things sound the same, look the same, or feel the same – but they are not. It doesn’t necessarily mean one is better or worse than another but uniquely dissimilar and serving, unlike purposes.
High-quality investment grade municipal bonds provide growth-like returns for investors in a relatively more conservative investment vehicle than equities. Have your financial advisor assess the opportunity as it pertains to your specific goals.
Markets can present challenges for investors as volatility, direction, supply, outside influences, and future expectations are continuously changing.
Doug Drabik discusses fixed-income market conditions and offers insight for bond investors.
Getting lost in the moment is easy to do. When planning and executing your fixed income portfolio, looking long term is more likely to get you to your goal. Fixed income portfolio allocations are often meant to first protect principal and second, to optimize income and cash flow per your specific circumstances.
Investors may be able to lock in higher yield levels notes Doug Drabik, Managing Director, Fixed Income Research and Nick Goetze, Managing Director, Fixed Income Solutions.