Common Misconceptions with Bonds

With the 10 year Treasury yield hitting 3% in April during a steady increase in interest rates to start 2018, we believe taking a look at several common misconceptions investors have with fixed income would be helpful. The article “4 Big Myths About Bonds” by Allan S. Roth on Financial-Planning.com does a great job reframing how an investor should view bonds and their role in a portfolio.

 

Index PerformanceAprilYTD1 Yr
US Stock (Russell 3000)0.38%-0.27%13.05%
Foreign Stock (FTSE AW ex US)1.68%0.53%16.18%
Total US Bond Mkt. (BarCap Aggregate)-0.74%-2.19%-0.32%
Short US Gov. Bonds (BarCap Gov 1-5 Yr)-0.35%-0.74%-0.77%
Municipal Bonds (BarCap 1-10yr Muni)-0.28%-0.98%0.26%
Cash (ICE ML 3Month T-Bill)0.13%0.49%1.17%

 
 

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.
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