To piggyback on our last article discussing the illogical 60/40 portfolio in today’s interest rate environment, I thought I’d pass on this article on how interest rates impact bonds.  Many people don’t realize the immense risks that rising interest rates pose to bonds.  In the inflationary 1970’s, bonds were called “certificates of confiscation” due to the immense losses investors took on them.  Below is a link to the Morningstar article, which I hope you’ll enjoy.

 

https://www.morningstar.com/articles/948326/how-do-interest-rates-affect-your-bonds