Q3:The Status of the Bond Market
This year, interest rates have increased dramatically, leading to significant declines in bond prices. You may be most aware of this if you own a bond mutual fund or ETF.
Interest Rates
The Investor’s Dilemma
Most individual investors’ portfolios include only two asset classes: public domestic equities and bonds, the “risky” and “safe” asset classes, respectively. This traditional portfolio (colloquially referred to as the “60 / 40” reflecting a typical allocation to equities and bonds) did not perform well from 2000 – 2010 but did well over the most recent ten years from 2011 – 2021.Â