Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
Whether it’s a personal health issue or financial adversity, the worst part of any crisis is the unknown. We have a medical crisis that has led to financial consequences and both are packed with unknowns. We have doomsday articles on one side and over the top optimism on the other. The discrepancy and subsequent uncertainty is displayed with the day-to-day and intra-day market volatility.
If we can agree that no one has all the answers and no one can predict how this unique time will play out, perhaps we can find some calm in evaluating what we do know.
US Corporate (A-rated) BVAL Yield Curve Vs. US Active Treasury Curve (source: Bloomberg LP 3/23/20 8:54)
Municipal (AAA) BVAL Yield Curve Vs. US Active Treasury Curve (source: Bloomberg LP 3/23/20 8:57)
To learn more about the risks and rewards of investing in fixed income, please access the Securities Industry and Financial Markets Association’s “Learn More” section of investinginbonds.com, FINRA’s “Smart Bond Investing” section of finra.org, and the Municipal Securities Rulemaking Board’s (MSRB) Electronic Municipal Market Access System (EMMA) “Education Center” section of emma.msrb.org.
The author of this material is a Trader in the Fixed Income Department of Raymond James & Associates (RJA), and is not an Analyst. Any opinions expressed may differ from opinions expressed by other departments of RJA, including our Equity Research Department, and are subject to change without notice. The data and information contained herein was obtained from sources considered to be reliable, but RJA does not guarantee its accuracy and/or completeness. Neither the information nor any opinions expressed constitute a solicitation for the purchase or sale of any security referred to herein. This material may include analysis of sectors, securities and/or derivatives that RJA may have positions, long or short, held proprietarily. RJA or its affiliates may execute transactions which may not be consistent with the report’s conclusions. RJA may also have performed investment banking services for the issuers of such securities. Investors should discuss the risks inherent in bonds with their Raymond James Financial Advisor. Risks include, but are not limited to, changes in interest rates, liquidity, credit quality, volatility, and duration. Past performance is no assurance of future results.
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