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Talk is rife about a bond bubble as the Fed prepares investors for a step down in bond buys. How should you read the interest rate tea leaves? What smoke signals might indicate a shift in policy? We review the influences on long-term interest rates and the clues the Fed might provide as it unwinds QE.
With yields rising, investors are getting nervous that the much-anticipated bond sell-off is here. Belay those fears with some historical perspective on interest rates and bond performance as well as four portfolio moves to make now.
In all the worry about bonds, investors forget that a bond's value actually increases the closer it approaches maturity, adding capital protection and income even in a rising-rates scenario. For investors looking for safety, diversification, and income, individual bonds can still be a good buy.
While expectations for rising rates are low, there are steps bond investors can take to guard against the risk of higher rates.
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