Lately, the topic at the forefront of headlines and discussions in the investment industry is the flattening US treasury yield curve. This phenomenon occurred as short-term interest rates, largely influenced by the Federal Reserve’s monetary policy tightening, have risen significantly. On the flipside, long-term interest rates, which are largely influenced by growth and inflation… Read more »
The Macro View
Where are interest rates headed? Naturally, this is a question that is frequently asked to us by both the advisors we work with and our individual clients. Our answer to clients? It doesn’t matter. As we have touched on before, no matter where interest rates are headed, bonds should always have an allocation in a… Read more »
Investors are starved for yield, we want them to be careful… In the current low interest rate environment, many investors are struggling to achieve their income targets and will often reach for yield to make up for any shortfalls. In a fixed income portfolio, this reach for yield can be accomplished in two distinct ways:… Read more »
Owning a Portfolio of Actively Managed Individual Bonds will be Critical in a Rising Rate Environment For advisors that allocate to fixed income (and we assume that to be most), the days of simply buying bond mutual funds/ETFs and having them sit essentially unmanaged in client portfolios are quickly coming to an end. Rising interest… Read more »
By now, we are sure you have heard someone in the financial industry declare that, “interest rates are rising.” We believe the proper response to that statement should be: What interest rates are rising? In the fixed income world, the two most common reference points for interest rates are (1) the federal funds rate, and… Read more »