Show Entire Article
Buy and hold may be dying as a stocks strategy, but it's gaining new favor for those in the bond market.
With the United States facing an uncertain economic future and yields hovering around attractive valuation levels, some managers are beginning to advise clients to hold longer bonds and collect income rather than seeking principal return in the shorter term.
Most recently, Barclays Wealth told clients this week to change from a short-dated approach to bonds and start holding longer maturities.
The recommendation is based in part on yields that are approaching 4 percent for the benchmark 10-year note and 4.75 for the 30-year bond.
Barclays considers slow post-recession growth typical of the post-War War II economy as the most likely scenario. But it makes ready for the possibility that when government stimulus ends and as the Federal Reserve has no room to cut its funds rate, consumers will not be healthy enough to continue to generate growth and the economy could enter a double-dip period.
"It's a little atypical to say duration is portfolio protection," Elizabeth Fell, investment strategist for fixed income at Barlcays, said in an interview Thursday. "But given our secondary scenario where we have a double-dip, it's the right type of protection we are promoting."
Page 1 of 6 | Next PageShow Entire Article
More Top Stories