With Ultra-Low Rates, Should You Still Invest In Bonds?


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MINT HILL, NC – Interest rates are near historic lows. That means the interest payments you get from bonds will also be smaller than they were just a few years ago. Should you still invest in bonds?

Despite providing less income than when interest rates were higher, bonds can provide you with other benefits.



For one thing, bonds can help diversify your portfolio, especially if it’s heavily weighted toward stocks. Also, stock and bond prices often move in opposite directions, so if the stock market goes through a down period, the value of your bonds may rise.

And bonds are usually less volatile than stocks, so they can have a “calming” effect on your portfolio. Plus, if you hold your bonds until maturity, you’ll get your entire principal back, providing the bond issuer doesn’t default, which is generally unlikely if you own investment-grade bonds. So, bond ownership gives you a chance to preserve capital while still investing.

Ultimately, while bonds may not provide the income they did a few years ago, they can have a place in a long-term investment strategy. Consider how they might fit into yours.

If you have any questions, please contact me at (980) 859-2549 or by e-mail at brandon.monette@edwardjones.com

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor

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