Bonds

The long-standing assumption of a consistent six-plus percent annualized return for U.S. equities, as supported by historical data, is being challenged.

Your biggest lesson here should be the importance of investment diversification and having a personalized framework to follow, as both will help keep you on track in the midst of inflation and interest rate cycles.

Interest rates might be at 20-year highs, but you can utilize this current economic environment to your advantage through the use of guaranteed lifetime income solutions, such as annuities or insurance products.

You won’t find the best investment guidance in fear-inducing news headlines or from conflicting economist forecasts. It’s guesstimates on all fronts. For the best course of action amidst puzzling economic environments, follow a comprehensive framework that’s designed to cover any outcome.

You have much to gain from tax-loss harvesting during volatile times, but even amidst the market’s 15 percent increase year-to-date, tax-selling opportunities still exist. Bonds in particular have underperformed and could be offset by gains elsewhere.

With interest rates creeping up over the past 18 months, what impact does that create for bonds in your portfolio?

What’s going on with the yield curve, and how does it impact you?

While 2022 became the first year ever for bonds to end with a negative five-year annualized return, markets have now recalibrated, resulting in higher yields (and higher future returns).

I’m a longtime fan of Professor Jeremy Siegel and his book, Stocks for the Long Run, but new research from a retired professor named Edward McQuarrie extends Siegel’s analysis of stocks versus bonds performance; finding that the two may be closer in returns than originally thought.

Stocks and bonds come with their own “risk premium” to investors, and the riskier an asset is, “the stronger the trend in the Random Walk”. To see that trend in a Random Walk assert itself, you have to stick around for the long run.

Even if you’re not one to pay attention to investment forecasts, we’re all likely curious of what 2023 will bring to our wallets.

Of course you want to know what sort of return you might expect upon investing your money, but how possible is that when it comes to a stocks and bonds portfolio?