Stay Calm Amid Bond Market Chaos

The risk is that you’ll lock your money in a low-yield prison just in time for normalcy to return to the financial markets.

(Image credit: BraunS)

I won’t mince words: “Lower for longer,” my overriding view of fixed-income yields, is trending toward “lowest imaginable.” Expect the imminent return of zero, or near-zero, rates on money market funds, three- and six-month CDs, and bank deposits. Bonds with 4% and 5% coupons will be called in bunches by their issuers. Mortgage refis will cut the payouts from Ginnie Mae funds. More dividend erosion is in store for short- and intermediate-term bond funds.

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.