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Home>Daily Capital>Investing & Markets>3 Tips to Help You Weather a Volatile Bond Market and Changing Monetary Policy

3 Tips to Help You Weather a Volatile Bond Market and Changing Monetary Policy

Investors are facing uncertainty when it comes to monetary policy, changing bond yields, inflation, and more. They’re faced with a new threat: a large U.S. Treasury supply that could boost bond yields and create more pressure on stock prices.

Stock markets around the world were selling heavily earlier this month as fears grew that the Federal Reserve might increase interest rates at a faster pace. The economy is expected to grow even faster in the coming year, and inflation will likely climb to around 2 percent or higher, according to reporting by The Wall Street Journal.

The bull market we’ve been in for a while now is highly tied to the policies from central banks around the world, so it makes sense that federal interest rates are under such scrutiny. Good economic news can easily be seen as bad news, and the opposite is true, too.

As headlines continue to create a negative outlook for bonds due to expectations of higher interest rates, many are left feeling that bonds are toxic and shouldn’t be part of an investment portfolio.

But is that truly the case? The answer is that it depends on the composition of your bond selection.

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The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.
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