With bond yields low and rising, what is the price of safety?
The conventional ratio for balancing equity risk with bonds assumed a 60/40 or 70/30 allocation. But with Government of Canada 10-year bonds and U.S. 10-year Treasuries yielding around 1.4% on Thursday — and both likely to rise with the ongoing recovery — the traditional allocations are costly. Fixed-income investors not only have to give up a lot of potential equity upside but must also shoulder the cost of falling bond prices, and be paid a pittance for doing it.
Original Article Source Credits: Advisor's Edge , https://www.advisor.ca/
Article Written By: Andrew Allentuck
Original Article Posted on: June 11, 2021
Link to Original Article: https://www.advisor.ca/investments/market-insights/with-bond-yields-low-and-rising-what-is-the-price-of-safety/