Hike Cycle’s Stage Suggests Buying Bonds Now
With the end of the Fed’s tightening cycle near, allocating to bonds now may offer greater returns than waiting until later to invest.
Source: Morningstar, Bloomberg, S&P. Bonds represented by Bloomberg U.S. Aggregate Bond Index and stocks represented by S&P 500 Index. Average annualized returns three years following the end of each of the past seven Fed rate hike cycles (end dates used: 8/21/1984, 9/4/1987, 2/24/1989, 2/1/1995, 5/16/2000, 6/29/2006, 12/19/2018). Past performance does not guarantee future results.
Bloomberg U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. It covers the U.S. investment-grade, fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. S&P 500 Index is an unmanaged index of 500 common stocks of large U.S. companies, weighted by market capitalization.
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