A few weeks ago, we looked at the “Ugly Side of Fixed Income”. In this video, Ed Butowsky delves into the good side and if bonds are possibly signaling a good time to invest if you believe that interest rates are going to remain flat and go sideways.
It is important to consider your total return needs (income + growth), and if this opportunity presents a worthwhile investment for you.
- For the last two years, bonds have been damaged by rising interest rates. If future rates were to go sideways and then eventually back down, this would create a quality opportunity. You can potentially receive not only income but capital appreciation.
- One must consider their needs for total return including both income and growth in their portfolio when devising a strategy.
- You can potentially receive not only income but capital appreciation through investments in bonds due to their YTM as Ed mentioned.