Bond Market
Bonds are a great way to protect your principal and set up a steady stream of income. They are usually much less volatile than stocks in the short-term, which is why conventional wisdom says you should gradually increase your bond holdings as you approach retirement. But all bonds are not created equal, and this page is designed to help you sort out the differences. Visit our Investing Strategies page for guidance on how to create a personal investing plan that includes both stocks and bonds.
Short-term bond funds pay higher yields than money-market funds and accounts — but they can suffer temporary losses when interest rates fluctuate. Still, it's rare for a short-term bond fund to lose money over a two-year period. That's what makes these funds good vehicles for longer-term savings.
Buying individual bonds would seem to be a good way to avoid the risk of rising interest rates that is present when investing in bond mutual funds. But can an individual build a personal portfolio of individual bonds without a detailed knowledge of the bond markets? Thankfully, given some of today's readily available tools, the answer is yes.
With money-fund yields scraping bottom, millions of savers have moved up the risk ladder to bond funds. Should you?
Unhappy with low yields in your fixed-income funds? You're likely to find better yields overseas — but not without higher risk and greater complexity.
At last: A tool for bond investors to help you build a bond portfolio by balancing risk (the worst case you're willing to accept) and reward (average annual returns).
SMI's model portfolios were back on the winning track in 2009, with both Upgrading and Just-the-Basics beating the overall stock market. Plus, we break down the wacky year in the bond market.
Investors buy bonds for safety. But bonds are quite vulnerable to a specific risk that is starting to pop up on investors' radar screens: inflation.
The U.S. has enjoyed relatively low inflation for so long that the inflationary economic pain of the 1970s has been largely forgotten. But many economists say current government policy is a recipe for renewed inflation — perhaps at a level rivaling or exceeding the 70s. If high inflation returns, what kind of investments will offer the greatest degree of protection? Which are most likely to suffer loss? We evaluate the likely winners and losers of a potentially inflationary future.
The corporate and municipal bond default phase of this credit crisis hasn't started yet, but it will. When it does, expect high-yield bonds to be hit hard.
Series EE bonds have a guaranteed payout — if you hold them long enough. But EE bonds have some serious downsides as well.
Stock investors have a number of helpful tools to measure risk, like standard deviation and SMI's relative risk scores. Similar tools exist for bond investors as well. We examine one of the best and explain how to apply it when selecting bond funds for your portfolio.
The way you divide your portfolio between stocks and bonds has a bigger impact on your eventual returns than any other single decision. Has the difficult first half of 2008 driven you out of stocks? Or are you persevering, trusting the traditional superiority of stocks will once again reassert itself? In this article, we look at historical patterns and how they can be used to guide your portfolio allocations as you plan for retirement.
Load vs. No-Load. Class A, B, C, R, Y, Z…what does all this mean? Selecting mutual funds can be confusing, but by learning just a few key principles, you can cut through the maze of confusion and find exactly the right funds for you. We deliver the basics you need to know about mutual fund types and share classes.
The yield curve can tell us quite a bit about the economy, inflation, and interest rates. So what is the yield curve, and how do you go about interpreting it? We demonstrate why, in this case, a picture is worth 10,000 words.
Each January we update our category allocations based on where we think the best opportunities lie in the year ahead. See what fine-tuning we suggest to take advantage of opportunities in the New Year.
Think the experts know which way interest rates will go next? Guess again.
With so many different types of bonds out there, how do you even begin to sort them all? SMI's approach is to categorize them by risk: the risk of defaults, and the risk posed by rising interest rates. Combining these two risk measures provides a valuable framework to begin the evaluation of any bond or bond fund.
Treasury Inflation Protected Securities (TIPS) have been on the scene for a decade now, yet many investors remain unaware of the diversification and inflation fighting potential these bonds can add to a portfolio. We explain how these unique bonds work and offer two easy ways to invest.
Investors often believe the returns from their bond funds are lower than they actually are. The cause of this confusion is usually their reinvested monthly dividends. We walk through an example illustrating how this dividend reinvesting process works.
55 million Americans own them, so how complicated can they be? In the case of U.S. Savings Bonds, the answer is — plenty.
