Three types of bonds: Part 2 - Floating rate notes
This is the second article in a three part series. Combined, the articles explain that bonds are appropriate investments across all economic cycles. There are three different bonds that work best under different economic conditions: fixed rate, floating rate and inflation linked.
There are three different bonds that work best under different economic conditions:
- Fixed rate
- Floating rate
- Inflation linked
It is important to hold an allocation to all three bonds for protection, as investors can never be sure that interest rates will not move higher or lower or that inflation will spiral. However, the portfolio weighting may change depending on the investor’s view of interest rates.
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