Justin is one of the most recognisable and trusted market commentators on television, radio, and in the press.
Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market’s roles and benefits for the private investor.
Each week we will bring you Justin’s latest thoughts and commentry.
BEYOND THE BOND BEARS – Read the full article here!
Wisdom after the event! To those who have been invested in the fixed interest market, the warnings of the dangers of rising yields have been widely telegraphed over the past few years. As yields fell, so the capital values of the bonds rose, and thus a wonderful bull market in these traditionally conservative investments developed. However as the yields fell ever lower, thus the risk of a reversal in this sector grew.
The effect of course would therefore be diametrically the opposite to their falling yields, and thus as the yields climbed back up then the value of those bonds would consequentially fall. Not only that, the size of any such moves would be exaggerated by the duration (length of time of the investment) such that the longer the date, the greater the price move in either direction. (See the graph below.)
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