If you are still not convinced that trying to time the market is an unwinnable…
You may have noticed that the Bloomberg Aggregate Bond Index is off to one of it’s worst starts of any year in the history of the index. Although bonds have been universally accepted as an essential element of investment portfolios for the balance they provide to owning stocks, their performance this year has left many wondering why they should continue to own bonds.
Just as many things look worse when you look at them under a microscope, so can investments. Investors should take a step back and understand that judging your bond allocation on such a short period can result in making poor decisions. There are reasons to believe there are bright spots on the bond horizon. The reduction in bond prices has created more opportunities in that segment of the market. Higher rates mean more income and better expected returns. Bonds still provide diversification to portfolios.
The current environment also highlights the benefits of incorporating alternative investments in a portfolio and the value that active management can add to a portfolio. So before you decide to make any big changes to your portfolio, hold your nose and give it a little time.
Content in this material is for general information only and not intended to provide specific advice.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
All investing involves risk including the loss of principal. No strategy assure success or protects against loss.