Welcome to our latest Market Commentary, this week’s agenda includes:
- The year for bonds?
- A brief insight into how government bonds work
- Bond yields rise
- Stock market slump jitters
- The medicine is working
- The oil price falls
- Will equity markets fall further?
The year for bonds?
It has been if you are focused on the yield!
Much has been expected of the bond market this year with inflation anticipated to fall rapidly. Inflation has indeed come down but better than expected economic resilience, along with left-field events (like the rising oil price) have prolonged the cycle. Bonds, as a result, have not performed as many expected. Many fund houses stated that they believed this year presented the best opportunity for bonds over the last 15 years.
As readers, you will know we have had very little exposure to bonds across our portfolios but whilst being tempted, we have refrained from committing more money into this asset class. With government yields rising, bond values have fallen making them even more attractive at these levels.
Bonds are important in setting the scene for investor confidence. There are many types of bonds but for now, I just want to concentrate on government bonds.
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Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.