Fed Rate Hikes Spawn 5% Yields for Safe Bonds

Fed Rate Hikes Spawn 5% Yields for Safe Bonds

While the Federal Reserve’s rate hikes have swelled stock prices, they have pushed bond yields up.

And that has made bonds attractive to those of us looking to support the fixed income portion of our portfolios. If you buy safe, individual bonds and hold them to maturity, you will almost certainly receive the face value of the bonds at maturity. And you can enjoy returns of almost or more than 5%.

Most investment experts recommend keeping at least some bonds in your portfolio as a hedge against falling stock prices. The standard portfolio weight is 60% equities and 40% bonds.

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