Bonds are back in town
Lex Hall | 05 Mar 2021Text size
Bond yields are rising. The 40-year bull market is over. Inflation is going to rise and the official cash rate in Australia will not be at 0.1 per cent by 2024. So said Peter Warnes this week in a wide-ranging and fascinating overview of the February earnings season and the manoeuvring playing out in the bond market. To understand the ramifications, you can watch the webinar here; after that I urge you to read Graham Hand’s lucid overview of what rising bond yields mean for equities.
If you’re like me, this week’s frenzied talk of rising bond yields will have had you reaching for the financial glossary to refresh the mind on fixed income, what it is and how it functions. Granted, fixed income may not be in the barbecue-stopper class of other topics such as cryptocurrency or short-selling, but the hope is to explain what fixed income is and how it works, thus enabling you to diversify your portfolio and impress your entourage while you’re at it.