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The Michael Shearin Group Morgan Stanley

The Michael Shearin Group Morgan Stanley
The Michael Shearin Group Morgan Stanley

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.)

Related: http://www.linkedin.com/pub/michael-shearin/11/4a/a93

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