Bonds are a very important part of most investors’ portfolios, providing lower absolute levels of volatility than equities, and protecting portfolio values from periods of severe equity market trauma that occur from time to time.
Owners of bonds should be prepared for unexciting returns going forward as we – potentially – move to a better world of higher yields. No one knows when or how quickly this will happen, and the value of any investment can fluctuate and cannot be guaranteed, so trying to second guess the guessers is a fool’s errand. Investors would be wise to remember the old saying: ‘You don’t need bonds, until you need them!’.”
RMT Ref 202/07.18/LH