Are Bonds Still a Safe Haven? - Adviser Investments

Are Bonds Still a Safe Haven?

November 12, 2020

Is it still worth holding bonds with interest rates as low as they are? Portfolio Manager Charlie Toole discussed our view on bonds in a low-rate environment in our recent webinar,* Looking Beyond the Election to the Recovery’s Future.

Please enjoy the excerpt below and click here for the full webinar replay to hear more.

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Charlie Toole:
Current interest rates are very low—that points towards low returns in the future. We’ve seen interest rates fall this year to new record lows, but despite those low rates, bonds still act as a safe haven.

I will caution that not all bonds—not all interest-bearing investment vehicles—are safe havens. There are a number of different factors that influence the price movements of a bond. One of the most important factors is the credit rating. That is a rating on how financially strong and financially stable the institution that’s issuing the bond is, whether it’s a government or a corporation. The higher the rating, the better the financial standing.

Typically, higher-rated bonds act as a safe haven when stocks are falling. Even in this low-interest-rate environment, I still think that’s the case.

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Click here for a replay of Looking Beyond the Election to the Recovery’s Future. Please contact us at (800) 492-6868 to learn more about comprehensive wealth management solutions.


*Webinar recorded after the market closed on Wednesday, October 28, 2020.

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