Reduce Exposure to Long-Term Bonds
The recent downward spike in the yield of the benchmark 10- and 30-year U.S. Treasuries has resulted in additional gains in bond prices. Unfortunately, for bond investors thinking that the good times will never end, we believe the markets are reaching the end of the line for interest-rate declines.
The 30-year bull market in bonds is largely a function of the steady decline of interest rates from the teens to where they are now. The question that bond investors must ask themselves is where do rates go from here? In our view, it is possible that rates will move sideways for some number of months, especially given the Fed's stated intention to keep rates low. For the very short term, we believe there could be intermittent decreases on any knee-jerk flight to quality trades....616 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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