The new year is just a few days old, but according to the WSJ, for mutual-fund
investors, the bond market already is proving tricky to navigate. On the surface, 2013 looks like it ought to
be a safe environment for bond mutual funds. The Federal Reserve is expected to
keep interest rates at rock bottom so the odds of a bear market should be slim.
But U.S. Treasury prices started the year by tumbling—to the
surprise of many—after last week's down-to-the-wire deal in Washington to avert
the so-called fiscal cliff.
Having avoided the worst of the automatic tax increases, the
country is now expected to avoid an economic slowdown and instead post moderate
growth. That, in turn, spooked some investors….
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