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Steve Coker, CFP
- Jun 3, 2019
- 3 min
Why Bonds?
Surprise! Interest rates are falling. The 10-Year Treasury rate has fallen from 2.6% at the beginning of the year to a 2.18% as of the end of May, a level not seen since 2017. This decline counters the conventional wisdom, and many economists who had generally predicted gradually rising interest rates. Rather than facing the headwinds of rising rates, bonds have experienced a tailwind of falling rates and have had a very good year so far. The Bond Aggregate Index returned
Steve Coker, CFP
- Apr 22, 2018
- 3 min
If Rates Are Rising, Should I Still Be In Bonds?
One of the questions we're frequently asked is: “If interest rates are rising, should I still be invested in bonds?” The question arises because bond prices tend to fall as interest rates rise. You can think of the function this way: as interest rates rise, holders of bonds that have the old, lower rate will be required to sell (if they sell) at a lower price to attract a buyer in the new higher rate environment. This relationship gets a lot of press but greatly oversimplifie
Steve Coker, CFP
- Sep 24, 2017
- 2 min
REITs Are Not Bonds
Real Estate Investment Trusts (‘REIT’s) have become a common alternative to bonds in portfolios. They are frequently sold to investors as stable, income-producing assets that have the additional safety of being backed by real estate. However, history clearly demonstrates that REIT’s are far from stable. Indeed, they are among the riskiest investments, more volatile than both stocks and most direct investments in real estate. Their use as a bond alternative creates a far riski
