Category: Bonds


The Worst Risk/Reward in History?

The yield on investment grade corporate bonds has moved all the way down to 2.35%. If the month ended today, that would be the lowest monthly close in history. Why is this important? Because the single best predictor of future returns for bonds are its starting yield. On average, the higher the starting yield, the […]

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What is Real?

High Yield credit spreads are lower today than they were during market corrections in 2011 and 2016. The same is true for Investment Grade credit spreads. Why is this notable? There were no recessions in 2011 or 2016 and today were are faced with what could be the largest economic contraction since the Great Depression. […]

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Bonds, Bubbles and Biases

What returns are you expecting from bonds over the next five years? If you’re like most investors, your answer is probably too high. Why? Because of something called recency bias, the human tendency to give more weight to the recent past in making projections about the future. And why is that a problem today? Because […]

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