📊 Why Allocating To Bonds Is More Attractive in 2023
Last year, the bear market in bonds shocked markets and raised questions about the role of fixed-income securities in portfolios. The primary driver of this was, until 2021, inflation had been steadily falling for 40 years, pushing interest rates lower and bond prices higher. This period supported the idea that bonds act as a stable foundation for portfolios, counterbalancing the price swings in stocks and other riskier assets. Naturally, with both stocks and bonds falling last year, many investors may wonder if they need to rethink the role of fixed income in their portfolios.
We discuss in this episode of The Wealth Effect Podcast:
📈 Fixed Income Sector Performance
📊 Current Bond Yields
📉 Corporate Bond Market Spreads
Matt Faubion, CFP®
Founder - Wealth Manager
Show notes and charts:
Bonds have had a positive start to the year
Bonds generate more income than they have in nearly 14 years
Corporate bond yields and credit spreads have improved too
The bottom line: Despite a challenging 2022 for bonds, it is not time to throw the baby out with the bathwater. This year is even more attractive to maintain a proper fixed-income allocation as interest rates stabilize and bond yields are high.
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