LIBOR is still being retired, just a little later than initially expected.
It was a bumpy ride for corporate bond investors this year. After the sharp, pandemic-driven selloff in February and March, total returns for most corporate bond investments have climbed their way back into positive territory.
High-yield bonds can generally offer more income in a very low-interest-rate world. However, if the economic or stock market outlook deteriorates, it could be a bumpy ride.
Bond investors face a challenging environment. The federal funds rate is back near zero, the 10-year Treasury yield remains stuck in a 0.5%-to-0.75% range, and inflation-adjusted (real) yields are deep in negative territory.
Treasury Inflation-Protected Securities can help protect your portfolio against rising inflation, but there are nuances you should understand.
We believe the risk that preferred-stock dividends will be suspended is low despite the recent announcement by the Federal Reserve that it is requiring banks to cap their common stock dividends.
Investors should consider these various investments—cautiously. Given the challenging economic outlook and high level of uncertainty, we believe bouts of volatility are possible, albeit not to the level witnessed in February and March.
When the COVID-19 crisis shook markets in March, the Federal Reserve moved early and aggressively to help increase liquidity in financial markets.
With the U.S. corporate default rate likely to rise, a growing number of investors may be wondering what they should do if their bond issuer is unable to repay its debts. Unfortunately, the answer isn’t always straightforward. There are, however, several things corporate bond investors should know.
Despite lower prices and higher relative yields, there’s room for prices of high-yield bonds, preferred securities and bank loans to fall further.