The Quiet Fall in Bond Yields

Daniel Kelley |

The Quiet Fall in Bond Yields
What’s behind the quiet fall in bond yields?

Provided by Kevin Guarino

 

With all the attention given to inflation, stock prices, and job reports, it’s been easy to overlook the remarkable move in the bond market during the past few months.

The yield on the 10-year treasury closed at 1.37% on Friday, July 9, down from its 2021 high of 1.74% in late March.1

What’s behind the quiet fall in bond yields? 

One explanation may be that reopening sentiment has turned a bit more cautious as the Delta variant of COVID-19 spreads globally. Another view is that overseas investors are buying Treasuries, effectively lowering yields.2,3

Still another school of thought says it's due to declining inflation concerns. Or maybe it's simply more money finding its way into bonds.2

Whatever the cause, the yield narrative has changed from just a few months ago when market pundits believed that the 10-year treasury was heading to 2%.1

Will yields keep trending lower or will they do an about face and move higher? A better question to ask yourself is, “does my investment strategy fit my goals, time horizon and risk appetite?” Challenge yourself to tune out the market noise and focus on what matters to you.

Check out these other Investing Education blogs
Investing During Periods of Inflation
Financial Strategies for Young Families

 

Kevin Guarino may be reached at 585-899-3940 or info@cloverleafteam.com

www.cloverleafteam.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

The market value of a bond will fluctuate with changes in interest rates. As rates rise, the value of existing bonds typically falls. If an investor sells a bond before maturity, it may be worth more or less than the initial purchase price. By holding a bond to maturity, an investor will receive the interest payments due plus your original principal, barring default by the issuer. Investments seeking to achieve higher yields also involve a higher degree of risk.

Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. Additional advisory services offered through Clover Leaf Financial, a registered investment advisor and separate entity from LPL Financial.

Citations
1. U.S. Department of Treasury, July 12, 2021

2. CNBC.com, July 8, 2021
3. The Wall Street Journal, June 11, 2021

A comprehensive financial plan incorporates four cornerstones for financial success.

  1. Cash Management

    We look at your overall financial picture to see where you are starting. We assess your cash reserve levels and develop strategies for building them up to appropriate levels, if necessary. We take into consideration potential emergencies, your income and expenses and outstanding debt, with a focus on maintaining adequate cash flow.

  2. Generational Wealth

    We put plans in place to help mitigate taxes and protect the assets you’ve worked hard to attain. Transferring properties, businesses and other assets can be complicated.  We offer experienced, qualified support, enabling you to navigate the complexities of succession and estate laws without suffering financial losses that can be avoided with proper care and attention.

  3. Investments and Financial Planning

    As part of our process, we’ll work to identify any gaps between where you are now and where you’ll need to be as you get closer to retirement, and we’ll set up plans to close those gaps. Using sound investment strategies, we organize your investments appropriately for long-term growth.  Once you’re ready for retirement, we’ll adjust your approach according to your circumstances at that time.

  4. Wealth Protection

    Protecting your assets ties in closely to protecting those you love the most, whether you’re considering a transfer of property or business, or you’ve experienced a loss due to death or accident. Losing a loved one or experiencing other devastating losses brings turmoil, no matter what the financial consequences are. Having financial protections in place minimizes the long-term financial and emotional effects when disasters occur. Planning for the unexpected is an essential component in a sound comprehensive financial plan.

We get to know your needs and work towards customized decisions based on research and relationships, not generic predictions or general knowledge. Just tell us where you want to go – if you’re not sure, we’ll help you figure it out – and we’ll strive to get you there.

The first step is for you to gain a better understanding of your own financial situation and we want to help!

Download our complimentary financial planning worksheet using the button below to get started! 
Download

The first step in developing your financial plan is to meet with an advisor. Contact us to set up a no obligation complimentary consultation.
Schedule Now

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.