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Bonds: Opportunity amid stubborn inflation and rising rates

September 20, 2022
clock 5 MIN READ

Bonds were on a winning streak from the end of 1981 through to the summer 20201 , with prices rising as yields fell. Today, the dynamic is changing as fixed-income markets witness the end of a 40-year bull market in bonds.

This regime change is a double-edged sword. Rising bond yields are accompanied by falling prices, as bond prices and yields have an inverse relationship. Investors buying bonds today will get paid a higher rate of interest than they would have in the recent past. Investors holding bonds today are seeing the value of their holdings decline.

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