‘Nobody puts bonds in the corner’: American actors Patrick Swayze and Jennifer Grey star in the film … [+] ‘Dirty Dancing’, 1987. (Photo by /Getty Images)
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Now more than ever, bond investors need to pay attention to their allocation and how it is being managed. Real Treasury bond yields, after adjusting for inflation, are above 2%—a level that, historically, has been very attractive. The yields on high-quality investment grade bonds are even higher.
Bonds, as an asset class, are now competitive with other asset classes, a situation we have not experienced in decades due to years of very low central bank policy rates. But sadly, in my conversations with investors and advisors, their bond allocation is still being neglected.
Perhaps this is due to experiences from the past decade, where investors earned very little on bonds and, as a result, the ability to add value…
