Corona is casting a giant shadow over all aspects of life.
Even though the market may have begun to recover from its initial crash, nothing is smooth sailing.
If you are too nervous to invest in the stock market now, bonds may look more enticing.
While an expanded bond portfolio may lower your exposure to stock market risk, it may be difficult to invest in bonds when rates are low.
The U.S. Fed set interest rates to about zero. If the interest rates on bonds is low, the government can borrow more money without paying so much interest. This way Uncle Sam can borrow enough money to pay out the money it promised in the economic stimulus package to its citizens.
Far-sighted companies may also borrow money at low rates, looking to fund future projects with what can seem like “free money.”
Even with low interest rates, there are reasons to invest in bonds and other fixed-income investments. Listen for an explanation of specific strategies using bonds for diversification and corporate bonds.
The Goldstein On Gelt Show is a financial podcast. Click on the player below to listen. For show notes and contact details of the guest, go to https://goldsteinongelt.com/radio-show