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A Good Time for Bonds?

Many people ask “When is the best time to get into bonds?” My answer is: Whenever you’re building an investment portfolio! In general, people buy high-grade bonds for two reasons: Preservation of capital and a fixed stream of income. Even though the market value of bonds will move up and down with interest rate fluctuations, the bond investor has the option of holding a bond until its redemption date, when he or she will receive back the full face amount of the bond. And while the investor waits for the bond’s redemption date, by call or maturity, coupon interest is regularly paid. Of course, repayment of principal and interest is based on the paying ability of the issuer. Usually, an investor’s expectations of where interest rates are headed will affect the weighting of bonds along the portfolio’s ladder of maturities, not whether or not to own bonds.

Click for A Good Time for Bonds PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

Interest Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14
today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

A Good Time for Bonds?

Many people ask “When is the best time to get into bonds?” My answer is: Whenever you’re building an investment portfolio! In general, people buy high-grade bonds for two reasons: Preservation of capital and a fixed stream of income. Even though the market value of bonds will move up and down with interest rate fluctuations, the bond investor has the option of holding a bond until its redemption date, when he or she will receive back the full face amount of the bond. And while the investor waits for the bond’s redemption date, by call or maturity, coupon interest is regularly paid. Of course, repayment of principal and interest is based on the paying ability of the issuer. Usually, an investor’s expectations of where interest rates are headed will affect the weighting of bonds along the portfolio’s ladder of maturities, not whether or not to own bonds.

Click for A Good Time for Bonds PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

Interest Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14
today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

Investing involves risk, including possible loss of principal. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall. Conversely, as interest rates fall, bond prices will rise.

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