Home Guides & Resources chevron_right Investing Bonds Are Back in Vogue Published March 27, 2023 Chris KeithSenior Vice President, Fixed Income Manager When bond prices were falling along with stock prices in 2022, many clients asked, “Why do I own bonds?” The banking crisis this month highlights the value of bonds in a diversified portfolio. As fear and uncertainty spiked, investors fled to safety, sending the price of high-quality bonds higher. The chart below shows the month-to-date and year-to-date returns for a handful of bond-market benchmarks tracking investment-grade and government-issue bonds. So even though the “falling yields” you may have been hearing about in recent weeks seem like a negative short-term outcome for bond investors, the opposite was true in this banking crisis for bonds. We wouldn’t be surprised if the upward momentum slows as the banking situation resolves, but it’s a good reminder that even the placid bond market can move quickly in response to current events—and that staying diversified redounds to your benefit over time. Note: Chart shows returns for the periods specified through 3/22/23 for the Bloomberg U.S. Aggregate Bond index (Investment-grade in the chart), the Bloomberg Municipal Bond index (Municipal), the Bloomberg Treasury Bond index (Treasurys) and the 10-year Treasury note. Source: Bloomberg. This material is distributed for informational purposes only. The ideas and opinions contained herein should not be viewed as recommendations or personal investment advice. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. Our statements and opinions are subject to change without notice. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs. For a summary of Adviser Investments’ advisory services and fiduciary responsibilities to our clients, please review our Form CRS here. © 2023 Adviser Investments, LLC. All Rights Reserved. Tags: bondsChart of the WeekChris Keith