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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Don't Be Complacent in Bonds |
THE WALL STREET JOURNAL - July 6, 2010 - By MICHAEL A. POLLOCK
If you own bond mutual funds, that part of your portfolio likely has come through the past few months' market turmoil in fairly good shape.
But don't take that steady performance for granted.
Many investment professionals worry that the huge stimulus the Federal Reserve and U.S. government have provided to the economy over the past few years will inevitably push up both interest rates and consumer prices. While the threat isn't imminent, it's not too early to take steps to protect the bond part of your portfolio from those twin demons in the distance.
Rising interest rates and renewed inflation would be a double blow to bond investors. When rates rise, the market value of existing bonds falls. And in an inflationary environment, the purchasing power of bonds' fixed income payments wanes.
For now, the European debt crisis has sparked renewed worries about the durability of the global economic recovery, thus probably delaying the time when the Fed will start raising interest rates. And the latest government figures show U.S. consumer prices, excluding food and energy, up only 0.9% from a year ago, the smallest increase since 1966.
Still, many expect the Fed to start lifting rates by the first half of next year to avert a return of inflation. Adding to the upward pressure on rates, the federal government is expected to have to sell larger quantities of bonds to finance its enormous budget deficit. Although the U.S. is considered the best credit in the world, Europe's debt woes have helped focus attention on how dependent our country is on a continued world-wide appetite for our debt, says G. David MacEwen, chief fixed-income investment officer at American Century Investments, Mountain View, Calif.
If the U.S. government's borrowing costs rise, higher interest rates would ripple through many areas of the fixed-income markets, pushing down prices of many kinds of bonds.
There are a number of ways to help insure your portfolio against these risks, such as funds that buy floating-rate loans and foreign bonds. Both of these have actually grown cheaper recently, as Europe's debt crisis has sparked a shift back to sectors viewed as safe havens, such as Treasurys.
That probably makes this a good opportunity to start repositioning your bond holdings, says Payson Swaffield, head of fixed income at Boston-based Eaton Vance Investment Management. Interest-rate spikes and flare-ups in inflation are very difficult to anticipate, and "you don't want to be late" in preparing for them, he says.
Here's a look at some types of bond funds that can help protect your portfolio—as well as some fixed-income areas to approach with caution.
Visit the WALL STREET JOURNAL for the complete article.
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Income Security Recommendation January 2013 Issue.
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