This episode from What’s Ahead describes why investors shouldn’t buy bonds. The great bond bull market that started in 1982 is over. If you have bonds in your portfolio, make sure they don’t go beyond three years.
Although interest rates have risen slightly in recent months, they are still at levels never seen before in recorded history.
Rates will rise as the economy recovers from the pandemic and the Federal Reserve begins to seriously print money to help pay for Joe Biden’s spending spree.
Arithmetically, this will mean lower bond prices.
In addition, the interest rate differential between treasury bills and low-quality corporate debt is far too narrow, given the risks involved.
It is best to get out of bonds or make sure they are short term. You won’t get much return, but you will avoid painful losses.