The Trend is Your Friend Til the End

 
 

2010 Interest Rates on 10 Year Bonds

1.      In 2010, bond yields have moved 1.7% from peak (4.0%)  to trough (2.3%)

2.      In 2010 the Fed has changed rates ZERO times.

Interest rates move up and down in small increments all day, every day.  Over time these small movements can have tremendous effects on your investments.  

It is imperative to understand that rate movements are determined by the market, not the Fed.  This is contrary to the way most people think of interest rates.  Rates can start moving up without any decision from the Fed, and that should negatively effect your portfolio. 

We’re coming out of a declining interest rate environment that lasted for 30 years!  This has been a friendly climate for fixed income investments.  What will the next 30 years be? 

How susceptible is your portfolio?  If you would like to review your investments, please don’t hesitate to call.

Remember: The purchase of bonds is subject to availability and market conditions. Market risk is a consideration if sold or redeemed prior to maturity. Some bonds have call features that may affect income.

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