Bonds have been in the dumps for months. Here’s why you should buy.
Financial Planning
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Bonds are the new sexy.
That seems counterintuitive. Thanks to persistent inflation, higher interest rates, Russia’s invasion of Ukraine and the pandemic-challenged global economy, bond markets are having their worst year since the First Opium War (in 1842). It’s a historic cratering in which U.S. investment-grade government and corporate bonds have pivoted from four decades of growth to losing nearly 10% so far this year.
The appealing news: Wealth advisors say good-quality bonds have gotten so cheap, they’re a relatively decent buy right now as a potential buffer to stocks — now suffering their own misery, with the S&P 500 index of leading U.S.-listed companies down just over 17% so far this year. It all makes fixed income “a very worthy investment today,” said Jesse Stumpf, a principal and director of fixed income at Kovitz Investment Group Partners, a wealth management firm in Chicago.
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