Monday, April 17, 2006

Time to exit the bond market?

That's what some of the pros seem to think. As the yield curve comes out of its inversion, investors at the longer end of the spectrum are losing money.
The average long-term-government-bond fund had lost 2.25% in the past four weeks and 4.23% in the past three months, according to Chicago-based Morningstar Inc.

1 comment:

JLM said...

Where were those "pros" three months ago?

In "The Case for Bonds" in today's Wall Street Journal, Jonathan suggests that now could be the time for judicious purchases.

"Sticking with a money-market fund has been a smart strategy over the past year, as interest rates have climbed and as short-term yields have rivaled those on longer-term bonds. But with 10-year Treasury notes recently breaking above 5% for the first time in almost four years, this could be a good time for cash investors to take a little more risk."

Clements likes inflation-indexed T-bonds. They yield almost 2.4% above the inflation rate.