Are bonds the market crash ‘shock absorbers’ they once were?

Disturbing signs suggest bonds and shares might move in the same direction.

Summary: Conventional wisdom suggests any fall in shares is largely offset by a rise in bonds, but there are signs that bonds and shares might move in the same direction. Investors could make sure their portfolio combines listed and unlisted assets, and shorten the duration of any bond portfolio as shorter dated bonds are less susceptible to capital loss if bond rates keep rising.

Key take-out: Keep a diversified share portfolio and consider a conservative trend or momentum trading strategy, which works better than an active strategy except in a flash crash.

Key beneficiaries: General investors. Category: Shares.


SMS Code Sent…

Hi {{ user.FirstName }}

Looks like you've already taken a free trial

Please enter your payment details

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to activate your membership

If you didn't receive SMS code please

Looks you are already a member. Please enter your password to proceed

Please untick this box when using a public or shared device

Verify your mobile number

Please sign up for full access

Updating information

Please wait ...

  • Mastercard
  • Visa

Related Articles