Fixed Income Q3 2020

Pushed lower by monetary policy and direct market intervention (such as asset purchases) by central banks. The result has been that bond holders, who purchase these instruments expecting a steady stream of coupon income, have been forced to accept lower levels of income. Another reason investors purchase bonds is to receive their principal back at a specified time. Unlike stocks, bonds mature and return principal on a maturity date (some bonds have flexible maturity schedules based on “call” provisions that allow the issuer to choose when to redeem the bonds). Unless the borrower defaults – typically a last resort – investors will receive their money back at maturity plus interest earned over the holding period.

In this way, bonds offer not only income but safety of principal. For this reason, bond investments often make sense as a way to invest for shorter-term horizons or to earn some incremental yield above cash
and money market instruments. Because of the relative safety of bonds, having a dedicated allocation to fixed income investments can provide a cushion in the portfolio against overall market risk. High quality bond prices tend to remain stable in times of uncertainty, especially when interest rates are not expected to rise and inflation is low.

As low as bond yields are in the United States, they remain relatively attractive versus the roughly $14 trillion in foreign bonds that trade with negative yields, a dynamic that we do not expect to see in the U.S.

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Fixed Income Q2 2023

As the Fed maintains its stance on higher interest rates, the short end of the fixed income yield curve has adjusted to reflect this likelihood.  After a prolonged period of bond yields hovering between zero and one percent, we now have the opportunity to invest in high-quality bonds with short maturities that yield above five percent. 
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Equities Q2 2023

Despite the ongoing global challenges, the stock market has shown impressive resilience in 2023. The S&P 500 Index has returned over 14% year-to-date, and the MSCI's All Country Worldwide Ex-U.S. Index is up by more than 8%.
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