Inflation
hurts bond returns because your fixed interest payments aren't worth as much going forward.
Not exact matches
Otherwise,
bond returns have been
hurt by rising interest rates.
Their
hurts and sorrows seem common enough — love not
returned, the complicated
bond of mothers and sons, paths not taken, paths taken and regretted — and Mayer plays them out in a drifting ebb and flow set against a serenely bucolic landscape belied by the turmoil within each savage breast.
Nice investigation, and I think it matches common wisdon: that a diversified portfolio including
bonds doesn't
hurt returns that much, but reduces volatility (some equate with risk) quite a bit.
This
hurts young investors (every 10 % in
bonds reduces the portfolio's expected rate of
return by 0.5 %).
Rising rates will
hurt certainly
bond returns, but the talk of
bonds getting «killed» is probably overstated.
Bottomline: A small allocation to
bonds may
hurt returns somewhat but the benefits in the form of reduction in volatility of the overall portfolio makes it worthwhile for most investors.
Pimco Total
Return Fund suffered its biggest decline in almost two decades in 2013,
hurt by similar positions in shorter - term debt and inflation - linked
bonds.
Meanwhile, foreign - issued U.S. dollar
bonds, as measured by the S&P U.S. Foreign Issued Investment Grade Corporate
Bond Index,
returned 0.28 % in February, and since it accounts for 25 % of the S&P U.S. Issued Investment Grade Corporate
Bond Index, the drag down effect for February
hurt the overall
return.