Photo: DANIEL ROLAND
Will a changing financial landscape take the shine off that historic safe place to invest your nest egg, bonds?
KTRH Money Man Pat Shinn says don’t be scared by nervousness in the market for bonds. “While some say the bond market is dead and no longer a good place to invest, I say it’s one of the best place to put your money as long as you know where to look.”
Earlier this month, the US treasury saw weak demand for its long term 20-year bonds and ended up offering higher interest rates for bond holders. That touched off speculation of a “collapse” in the bond market, prompted by economic uncertainty and, possibly, a long term trend of longtime baby boom investors moving their savings out of bonds.
Shinn says such concerns are unwarranted, although investors may want to watch for bonds likely to offer higher yields, which he says are more likely to be short term bonds.
The value of longer-term bond investments, he said, may become clear later in the year as the effects of tariffs, and potential inflation fighting moves by the Federal Reserve become more clear.
“Depending on the way tariffs shake out,” he said, “we typically want to stay away from longer term bonds and focus more on shorter term rates. That’s the sweet spot of the market.”
Some bonds, he said, offer returns that rival the gains possible from stocks, but without the risk.
“The United States is still the best credit in the world,” he declared, “and when people get scared, they only want to own United States Treasury bonds.”