Insights

June 23, 2022
Dr Steve Garth

Deja vu all over again

Aside from cash, good quality investment grade bonds are generally the most stable and defensive component of an investor’s portfolio. Yet over the last 12 months have bonds have fallen in value by around 10%. This has caused anxiety and confusion for many, especially considering most investors haven’t taken the time to fully understand this normally “sleepy” asset class. The truth is, the extreme price action we have seen on bond markets is very unusual, and 2022 may in fact be the worst year on the bond market – ever. 

Does this mean investors should ‘throw in the towel’ on bonds? Probably not. Watch this video to see Minchin Moore investment committee member Dr Steve Garth explain what’s been driving the unusual volatility in bonds, and how investors should think about their bond portfolios going forward.

Survival Guide for Volatility

Investors around the world have realized that fighting inflation is going to be painful—which in turn has caused turmoil in the markets. Since the start of the year the Australian market is down 12% – but that’s good relative to other markets.