By Frank Mullen
The market has often been described as manic depressive – wildly swinging from periods of exuberance into the depths of pessimism. We have a front row seat to this behaviour as we witness the volatility in bond prices and yields, watching investor sentiment change daily. Our conversations with our clients have given us even deeper insight into what market participants are worried about based on their questions. The number of inquiries we get about the short-term performance of a particular asset class or investment gives us a good indicator of how they’ve been doing recently. We believe that the most-informed clients are the ones most likely to reach their financial goals, and we strive to address their concerns and reinforce our investment approach.
Over the last 12 months, we’ve received many questions, but the most popular topics have been inflation and interest rates. At the start of 2022, it was consensus that rates would stay low forever and that the only way to earn any yield in fixed income was to extend your duration. We were unwilling to expose our portfolio to duration risk and welcomed questions challenging our fixed income portfolio’s low duration.
Read the rest of Frank’s comments on the EdgePoint Website: Asking the Right Questions
Or download the PDF here: Q1 2023- Fixed income commentary
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