As the Fed starts tapering its quantitative easing program, will interest rates rise? Lance Roberts of Streettalk analyzes the current situation. It’s possible to make money with a bond fund even in a rising interest rate environment. The returns from Goldman Sachs’ Strategic Income Fund (GSZAX) are proving the point, earning 5.3% in 2013 through December 13th and beating 96 percent of its rivals. The strong performance of equities this year has made some investors wish their portfolios were more concentrated in them. Jeff Hussey cautions that it is when diversification begins to fall out of favor that your portfolio may need it the most.
Will Federal Reserve Tapering Cause Interest Rates To Rise?- There is a belief that as the Federal Reserve begins to taper, interest rates are set to rise. Lance Roberts does not believe that to be the case and explains why in this article.
How To Make Money In A Bond Fund When Interest Rates Rise – Flexible bond funds such as the Goldman Sachs Strategic Income Fund are proving it can be done. “This portfolio has a shot at making money in any rate environment,” says co-manager Michael Swell.
Is Your Portfolio Too Diversified?- Jeff Hussey, Chief Investment Officer at Russell Investments, has spent two decades studying and employing global diversification. He’s come to the conclusion that when diversification is out of favor, it may the right time to bet on its potential financial health benefits. In short, although diversification doesn’t promise gains or protect against loss, it remains essential even when the market tempts us to shift increasingly toward concentrated exposures. http://www.advisorperspectives.com/commentaries/russell_111413.php
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John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller