How investors should looking at the bond market right now
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Following Yahoo Finance Invest 2024, Yahoo Finance markets and data editor Jared Blikre and producer Sydnee Fried welcome Kathy Jones, chief income strategist at the Schwab Center for Financial Research, to the Stocks in Translation podcast.
The team dives into key takeaways from Yahoo Finance Invest, including insights from Neel Kashkari, president of the Minneapolis Fed; Arvind Krishna, CEO of IBM; and economist Joseph Stiglitz.
They start by discussing recent bond market volatility and strategies for navigating it.
“There are two things to consider when investing in bonds. One is the duration, meaning roughly the maturity of the bonds that you invest in,” Jones explains. “The other is credit quality. You [want to] be invested, you know, where you think you're safest, or do you [want to] take some risks and get higher yields?”
She notes the option of focusing on shorter maturities with higher-grade quality as well.
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Jones also breaks down what factors she looks for in the bond market and what’s relevant for investors right now.
“We look at the pace of economic growth. particularly consumer spending, 'cause consumer spending is like 70% of what constitutes economic activity,” says Jones. “We look at inflation and the inputs to inflation. Are they rising? Are they falling? And then we, uh, we look at Fed policy because the Federal Reserve sets the policy rate for short-term bonds and, and it has an influence on everything in the fixed-income world.”
When asked how investors should approach bond investments, Jones cites the old saying, “Stocks get you rich. Bonds keep you rich.”
Check out more content from Yahoo Finance Invest 2024 here.
Twice a week, Stocks In Translation cuts through the market mayhem, noisy numbers and hyperbole to give you the information you need to make the right trade for your portfolio. You can find more episodes here, or watch on your favorite streaming service.
This post was written by John Tejada.