Five Myths of Bond Investing
Are bonds a portfolio's bulwark or its Achilles' heel? Investors can't seem to decide.
Over the last seven months of 2013, amid rising interest rates and falling bond prices, skittish investors yanked $18 billion more out of bond funds than they put in.
Then, as stocks faltered in the first six weeks of 2014, investors put in over $28 billion more to bond funds than they withdrew.
Adding to the confusion: Wednesday's disclosure that Federal Reserve officials are debating whether to raise interest rates sooner than expected. The yield on the 10-year U.S. Treasury hit 2.75% on the news, up from 1.62% in May. (Bond yields move in the opposite direction of prices.)