Issues
Sure, it was a tough year for stocks. But 2022 was the worst year ever recorded for bonds.
The benchmark 10-year Treasury lost more than 15% in 2022, the worst calendar year performance ever recorded since it started being tracked in the 1920s. The 10-year + Treasury Bond Index lost 29.45% for the year, also the worst performance on record.
But the disastrous year creates an opportunity. Last year seems to have squeezed many years of poor performance into one. Now bonds actually pay decent interest again. And every negative year for bonds ever recorded has been followed by a year of positive returns.
In this issue, I highlight a long-term corporate bond fund. It allows access to some of the highest yielding investment grade bonds in the last 15 years while also providing a monthly income. The fund is very likely to have a positive total return for the year, and perhaps very positive, at a time when the stock market is highly uncertain.
The benchmark 10-year Treasury lost more than 15% in 2022, the worst calendar year performance ever recorded since it started being tracked in the 1920s. The 10-year + Treasury Bond Index lost 29.45% for the year, also the worst performance on record.
But the disastrous year creates an opportunity. Last year seems to have squeezed many years of poor performance into one. Now bonds actually pay decent interest again. And every negative year for bonds ever recorded has been followed by a year of positive returns.
In this issue, I highlight a long-term corporate bond fund. It allows access to some of the highest yielding investment grade bonds in the last 15 years while also providing a monthly income. The fund is very likely to have a positive total return for the year, and perhaps very positive, at a time when the stock market is highly uncertain.
Updates
The market is doing everything it can so far this year to be unlike 2022. It’s up. And the best performing sectors are cyclical.
So far this year, the S&P 500 is up about 5% and the technology stock-heavy Nasdaq is up almost 10% in just a month. Not only are the indexes higher but they are being driven by last year’s worst performing sectors, technology and consumer discretionary.
So far this year, the S&P 500 is up about 5% and the technology stock-heavy Nasdaq is up almost 10% in just a month. Not only are the indexes higher but they are being driven by last year’s worst performing sectors, technology and consumer discretionary.