The Risk in Bonds

The Risk in Bonds

by Amber Idleman on Mar 17, 2017

Many investors think that bonds are safe.From the perspective of principal risk, high quality bonds offer a level of safety, But I am concerned about the outlook for bonds in a rising interest rate environment which we seem to be entering. Bond values appreciate when interest rates are declining, which they did from 1981 – 2016. When rates rise, bond values decline. Rates have been rising since last summer. Also, bonds lock in an interest rate for the life of that bond. There is no opportunity to grow that income stream.

The following article is a good explanation of this and also the importance of active management.

http://proactiveadvisormagazine.com/risks-of-bonds/?utm_source=What+advisors+are+saying+1+-+V13+I9+-+UpClose+-+a&utm_campaign=WhatAdvisorsAreSaying+emailone&utm_medium=email

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