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"But for bond investors, starting yields matter much more than historical returns—and the higher the yield, the better. Current yields are higher today than they have been for most of the past 15 years."
"Investors can capture a 6% yield on a mix of taxable bonds, including preferred stock. That could provide a nice compliment to stocks, particularly in tax-advantaged accounts such as 401(k)s and individual retirement accounts. Here is a closer look at five fixed-income sectors."
Yes. One of several excellent articles in this week’s Barron’s. Thanks for posting.
(I’ll add that I’m not much of a bond fund / bond investor or very well informed - but do hold several bond CEFs in small quantity.)
Another good read this week (Barron’s) - Elizabeth O’Brien’s “The Trade War Is Here. Retirees, It’s Time to Protect Your Portfolio” quotes several knowledgeable money managers who mention some more conservative equity or equity-linked investments for retirees.
Yes, there are several excellent Barron's articles in this week's magazine. I would recommend reading Randall Forsyth's "U.S. Spending Threatens the Dollar's Status..." Unfortunately, I'm unable to provide a link that is not paywalled.
I would recommend reading Randall Forsyth's "U.S. Spending Threatens the Dollar's Status...".
I did “lip service” to Forsyth’s piece in my “Gatsby” post earlier today. Agree with you that a fuller reading is essential. A number of well informed sources are cited or quoted directly by Forsyth.
"But for bond investors, starting yields matter much more than historical returns—and the higher the yield, the better. Current yields are higher today than they have been for most of the past 15 years."
"Investors can capture a 6% yield on a mix of taxable bonds, including preferred stock. That could provide a nice compliment to stocks, particularly in tax-advantaged accounts such as 401(k)s and individual retirement accounts. ......
When bond share prices fall, yields rise. In the past, I have chosen to ride it down and reinvest the rising yields. But at 70 now, I think my risk tolerance will not permit such a thing anymore. I've created a cash-ballast sleeve, and moved a bunch into higher quality bonds, rather than Junk. "Time to preserve your portfolio," as quoted by someone else in this thread.
The higher spreads split investors “into two camps—head for the hills or this is an incredible buying opportunity,” Fridson tells Barron’s. This “could be the most bifurcated decision many investors will ever face.”
As noted on other threads we "headed for the hills" a coupla years ago.
It all depends on why you hold bonds, someone's goals, style and timing. VGIT (simple treasury index) made 3.2% this year. Is it bad? Nope. CLOZ made about 12% in 2024 with a nice smooth uptrend. Cat bonds made even more.
There is only one bond fund that performed according to my style in 2025. But, as long as my indicators show high risk, I'm staying out in MM.
TR matters a lot more than the income/yield. If something pays you 6% income, but yearly TR=2%, then you made only 2%. Something that pays only 4% and made 4% is a better choice.
The higher spreads split investors “into two camps—head for the hills or this is an incredible buying opportunity,” Fridson tells Barron’s. This “could be the most bifurcated decision many investors will ever face.”
As noted on other threads we "headed for the hills" a coupla years ago.
Good article. It seems to me that caution is warranted and heroics should be avoided in the current environment. I mostly use bonds to diversify equity risk. Junk bond exposure is via DOXIX and BBBMX which currently hold ~5% of their assets in high-yield bonds.
Comments
(I’ll add that I’m not much of a bond fund / bond investor or very well informed - but do hold several bond CEFs in small quantity.)
Another good read this week (Barron’s) - Elizabeth O’Brien’s “The Trade War Is Here. Retirees, It’s Time to Protect Your Portfolio” quotes several knowledgeable money managers who mention some more conservative equity or equity-linked investments for retirees.
Overall excellent issue.
I would recommend reading Randall Forsyth's "U.S. Spending Threatens the Dollar's Status..."
Unfortunately, I'm unable to provide a link that is not paywalled.
Newly issued, no purchase fee, Schwab.
A small position in BUBIX is the only thing I have added to the IRA. It hasn't been bubkis.
https://www.marketwatch.com/articles/high-yield-junk-bonds-9ed6141e?mod=search_headline
Excerpt:
The higher spreads split investors “into two camps—head for the hills or this is an incredible buying opportunity,” Fridson tells Barron’s. This “could be the most bifurcated decision many investors will ever face.”
As noted on other threads we "headed for the hills" a coupla years ago.
VGIT (simple treasury index) made 3.2% this year. Is it bad? Nope.
CLOZ made about 12% in 2024 with a nice smooth uptrend. Cat bonds made even more.
There is only one bond fund that performed according to my style in 2025. But, as long as my indicators show high risk, I'm staying out in MM.
TR matters a lot more than the income/yield. If something pays you 6% income, but yearly TR=2%, then you made only 2%. Something that pays only 4% and made 4% is a better choice.
Good article.
It seems to me that caution is warranted and heroics should be avoided in the current environment.
I mostly use bonds to diversify equity risk.
Junk bond exposure is via DOXIX and BBBMX which currently hold ~5% of their assets in high-yield bonds.