Still, they end up in a similar place.ĭespite all the emphasis on owning a diversified investment portfolio, stocks and bonds have been extraordinarily correlated in 2022. bonds, you'll notice the difference in volatility. If you compare the year-to-date charts of U.S. The S&P 500 has lost 19% year-to-date through Monday and given us the most "down days" of 1% or more since 2009. Simply put, bond funds have never had a year this bad. bonds fell anywhere near this much peak-to-trough was 1979-80 when the index declined almost 13% over a six-month period. The only other time investment-grade U.S. If we add high-yield bonds into the calculation, the losses swell even larger. Aggregate Bond Index, meant to approximate the investment-grade U.S. Year-to-date through Monday, the S&P U.S. Millions more are in for a rude awakening when they take a closer look at the numbers. Gritting their teeth, the clients then ask, "What about the performance of our bonds?" To which their adviser replies, "That is the performance of your bonds."įor millions of investors, this conversation has already taken place. The discussion includes a summary of recent performance, during which the adviser informs the couple that they have lost nearly 15% year-to-date. Imagine the following scenario: A husband and wife sit down with their financial adviser for a regular review meeting.
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