4th Quarter Fixed Income
The bond market was more uncertain than the stock market. It fluctuated throughout the year trying to understand the direction of the economy and interest rates. The benchmark 10-Year Treasury started the year yielding about around 3.9%, rose to a high yield for the year of 4.7% in April and fell back to 3.6% in September, before ending the year at 4.6%. (Yields move inversely to prices). Most analysts expect the Treasury yield will remain between 3.5% and 5.0% in 2025. We will not be surprised to see it reach 5.5%.
Other Assets: Our aversion to long-term bonds remains. But we explore various maturities through laddered investments with a mix of U.S. Government, municipal, and high- quality corporate bonds. We also like the current opportunities in money market funds.
Also, for some clients, we look at alternative investments through Broadly Syndicated Loan vehicles and Collateralized Loan Obligations which can provide investors with greater security through collateral, yields, and a hedge against inflation through floating rate structures.
