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Tuesday, July 30, 2013
The Great Rotation As Well As The Bond Market Impact
Many have been warning for years that bonds were doomed but until recently they were viewed as outsiders or off on their time table. But a week ago an article from CNBC (simply click here to view the article) came out calling the mass exit from bonds and bond funds a huge warning bell to those still holding on without a thorough evaluation.
Government Bonds are Safe, Apart from for Last Month
Investors are leaving bond funds in mass, the 10-year treasury bond has decreased about 10% in value since May. That's right, a government bond lost a large amount of value in approximately 1 month! Government bonds tend to be used for safety and protection but the last month or so has shown the true colors of where risks can be shown in hidden corners.
Why Might This be Going on?
Interest rates have been at some of the lowest numbers we have ever seen, and now they are starting to climb. Whether rates actually spike or there is a perception they will spike, this can have a dramatic impact on bonds and bond funds.
If this is only the beginning of an upward move, bonds and bond funds could be in for some more dramatic drops in short periods of time. For bond funds a lot can be told from their average duration as to how the fund will respond to rises in interest rates.
Maintenance is the number 1 concern in regards to our investments. Keep as much as possible of what you have and earned.
Matt Golab
Chief Advisor of Aaron Matthews Financial Resources
Matt is an authority on creating innovative tax and investment strategies to help his clients succeed in their retirement years. For contact info and to learn how Matt can assist you with your retirement or with any question just click here! The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him in the national spotlight. He is often featured in Senior Market Advisor Magazine, a publication which attracts the top financial planners in the country. Matt has been featured in newspapers around the country passing on the principals for a successful retirement. Golab is often asked by national websites that focus on the education of consumers to provide his knowledge on the areas of retirement and retirement income plans.
Golab is the Author of The Consumer's Guide to Planning Your Retirement: Your Guide to Mental Peace and Financial Well Being. Matt emphatically states his mission, "I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market".
Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC. Registered Investment Advisor
Government Bonds are Safe, Apart from for Last Month
Investors are leaving bond funds in mass, the 10-year treasury bond has decreased about 10% in value since May. That's right, a government bond lost a large amount of value in approximately 1 month! Government bonds tend to be used for safety and protection but the last month or so has shown the true colors of where risks can be shown in hidden corners.
Why Might This be Going on?
Interest rates have been at some of the lowest numbers we have ever seen, and now they are starting to climb. Whether rates actually spike or there is a perception they will spike, this can have a dramatic impact on bonds and bond funds.
If this is only the beginning of an upward move, bonds and bond funds could be in for some more dramatic drops in short periods of time. For bond funds a lot can be told from their average duration as to how the fund will respond to rises in interest rates.
Maintenance is the number 1 concern in regards to our investments. Keep as much as possible of what you have and earned.
Matt Golab
Chief Advisor of Aaron Matthews Financial Resources
Matt is an authority on creating innovative tax and investment strategies to help his clients succeed in their retirement years. For contact info and to learn how Matt can assist you with your retirement or with any question just click here! The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him in the national spotlight. He is often featured in Senior Market Advisor Magazine, a publication which attracts the top financial planners in the country. Matt has been featured in newspapers around the country passing on the principals for a successful retirement. Golab is often asked by national websites that focus on the education of consumers to provide his knowledge on the areas of retirement and retirement income plans.
Golab is the Author of The Consumer's Guide to Planning Your Retirement: Your Guide to Mental Peace and Financial Well Being. Matt emphatically states his mission, "I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market".
Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC. Registered Investment Advisor
