BIL - Balancing Act: Maintaining Liquidity And Purchasing Power With Short?Term Bonds
Investors globally are walking a tightrope today, balancing risk-taking and risk management. As growth appears poised to slow, the outlook for financial markets remains uncertain ? a situation compounded by increased cost of capital, tighter financial conditions and heightened market volatility.
For some investors, the right balance can likely be found at the front end of the yield curve. An actively managed short-term bond strategy (which in the U.S. could include tax-efficient municipal bonds) may offer:
- Potential defense against volatile markets
- Improved liquidity for current and future spending needs versus longer-duration bonds
- Optionality to move