Compass Watch
Many market pundits continue to declare that higher interest rates are coming, predicting bad news for fixed income investors. As Compass bond investors already know, higher rates (yields) mean lower prices for most already-issued bonds (but for those holding bonds to maturity, like we do, this declaration is a moot point).
Since mid-2014, the U.S. trade-weighted broad dollar index1 has appreciated nearly 20%2, with the largest gains against the Japanese yen, Mexican peso, Canadian dollar and the Euro. Currency movements have always been complicated both in their causes and consequences.
Just nine months ago, U.S. stock indexes were hitting all-time highs as the bull market was passing its six year anniversary (from the March 2009 lows). Since then, the Federal Reserve has begun raising short-term interest rates, oil has continued its precipitous retreat (from its recent high, oil is down 68%) and …