You are currently browsing the Capital Comments weblog archives for the day 5. September 2010.
5. September 2010 by Dan Walkow, CFA, CMT.
The fears of a double dip in the economy have investors running to the percieved “safety” of bonds and bond mutual funds in droves. As a result interest rates paid by bonds have been pushed down to generational lows.
Doug Kass of Real Money sums it up well, “At current yields, bonds represent certificates of confiscation, and bond holders face the likelihood of large capital losses. ”
If you have to own bonds one wants to own only very short term maturities where you intend to hold the bond to maturity. At particular risk are bond mutual funds where there is no fixed maturity.
Doug Kass sums it up well here, well worth a read!
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