Advertisem*nt
SKIP ADVERTIsem*nT
You have a preview view of this article while we are checking your access. When we have confirmed access, the full article content will load.
Supported by
SKIP ADVERTIsem*nT
Strategies
Our columnist answers questions about the troubles in the bond market, and what they mean for investors.
By Jeff Sommer
It’s been a horrible start of the year for the bond market, the worst in decades.
If you hold bonds in a mutual fund or exchange-traded fund, it’s highly likely that your quarterly statement next month will show that you have lost money.
Last week, I wrote about the market rout and about the signals that the bond market may be sending about the state of the economy.
Many readers have asked for further explanation of what has happened and what, if anything, they should do about it. Here are some answers.
How bad are the bond market declines?
Really, truly, historically bad. The most important measure of the overall investment-grade U.S. bond market is probably the Bloomberg Aggregate Bond index. It was down 6.66 percent this year through Thursday.
How terrible is that? Well, Sébastien Page, the chief investment officer for T. Rowe Price, a major asset manager, said the overall bond market’s three-month performance is the worst since 1980. For Treasurys, it’s the worst three months since at least 1926, when comparable data began to be available.
“It’s definitely newsworthy,” he said. “This is no exaggeration.”
Does it make sense to hold bonds if they are losing money?
Advertisem*nt
SKIP ADVERTIsem*nT
