BHK - What Types Of Bonds Are Attractive In A Rising Rate Environment?
Bonds are an important part of portfolios, even if in small amounts. They serve to moderate volatility and minimize maximum drawdowns. Over the past 35 years, bonds have generated interest income and capital appreciation as interest rates declined from very high to very low levels. We are now in a period of rising interest rates, in which bonds with fixed payments will generate interest income and capital depreciation.
AXIOM: |
When interest rates fall, fixed income bond prices rise, and when interest rates rise, fixed income bond prices fall. |
That prompts the question: What types of