The Risk of Safety
Safety has rarely been more expensive—or more dangerous. Curtis Gross, FAI’s Director of Research, is interviewed by the Wall Street Journal.
For the past five years, the Federal Reserve has pushed down the interest rates on traditionally safe assets such as Treasury bonds to near record lows, in hopes of sparking the economy. Today’s 10-year Treasury rate of about 1.95% is about half its level in January 2008.
Rock-bottom rates hurt retirees investing for income—and create a dilemma for the millions of savers who rely on bonds to steady their stock portfolios. Bond prices move in the opposite direction of yields, so when prices fall, yields climb. With prices near record highs, even a small move can produce losses for investors.
To read the full artcile click here.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by FAI Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from FAI Wealth Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. FAI Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of FAI Wealth Management's current written disclosure statement discussing our advisory services and fees is available for review upon request.