by Alan Friedman
Because share price values fluctuate, equities come with built-in volatility and their performance is unpredictable. That said, they’ve provided high rates of return for decades and they’ve long been a go-to for successful investors. But as Bob Dylan wrote way back in the sixties, “the times they are a-changin.” Significantly too.
...investors also get paid interest twice a year and you get your money back at maturity.
Timing, as they say, is everything. And based on current valuations, the bond market is offering investors the near potential for equity-like returns, with less volatility and risk. Which certainly makes it easier to sleep at night. And on top of the reduced volatility, fixed income investments offer contractural returns — meaning, investors also get paid interest twice a year and you get your money back at maturity.
Potentially higher returns with more stability. To quote the legendary American investor, writer and co-rounder of Oaktree Capital Management, what’s happening now is ushering in a “sea change.” Marks explains it thoroughly in his October 11 Memo, “Further Thoughts on Sea Change.” Here’s a link to the Oaktree website where you’ll find it.
Like all investors right now, you should also consider talking to your advisor about reevaluating your investment strategy. And why wouldn’t you? Why wouldn’t all investors? We’ve got an opportunity to earn positive returns, while minimizing the traditional volatility of the equity market.
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Alan Friedman is an Investment Advisor with CIBC Wood Gundy in Toronto. The views of Alan Friedman do not necessarily reflect those of CIBC World Markets Inc. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Regulatory Organization of Canada. If you are currently a CIBC Wood Gundy client please contact your Investment Advisor. Clients are advised to seek advice regarding their particular circumstances from their personal tax and legal advisors.
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