How You Can Survive a New Era in the Bond Market
For investors, last year's losses in the bond market should serve as a wake-up call that the era of big bond-market returns is over. For the foreseeable future, many say meager returns and occasional losses will be the norm.</br></br>With the Federal Reserve having pushed interest rates to record-low levels to boost the economy, bond-market math means returns for the next five to 10 years should be in the low single digits at best, market pros say.</br></br>That doesn't mean investors should abandon bonds. That's especially the case for those, such as retirees, who need to protect their portfolios against significant price swings.</br></br>But for many investors, particularly those with very long time horizons, it may call for notching down the level of U.S. government bonds in favor of higher-returning investments, including conservative stocks, even if that means greater short-term ups and downs in a portfolio.</br></br>Worst Loss in 19 Years