My latest post for Alpha Baskets looks at the kick to the stomach taken in the bond market with some thoughts on what to do about it.
From the post;
The parts of the income market that should be relatively safe to own have in fact been relatively safe as rates have been rising over the last six weeks. High yield tends to be far less interest rate sensitive because the duration tends to be short and the yield is thought to offer a cushion against rising rates in lower yielding segments. Bank loan funds have done well through this because their interest rate resets every 90 days. Short dated paper is doing well because it will pay out at par so soon. Gundlach likes TIPS and while there are short dated TIPS and TIPS funds available, even longer dated TIPS funds are holding in just fine.
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