The bond market has had its share of volatility in the past year, sending mixed signals to investors.
The Federal Reservehas been pulling out all the stops to keep the economy growing and avoid Japan-like deflation . At the same time, however, signs of inflation are growing, and investors are taking on more risk for higher yields . An allocation to bonds can provide income and stability in such an unpredictable environment.
Bears and bulls alike agree that the current sluggish U.S. growth should benefit bonds .
ETFs broadly covering investment grade, high-yield and convertible bonds are an investor’s best option to deal with uncertainty.