Why the Strong Second Quarter from Bonds?

by | Jul 7, 2014 | Stock Market Comments, Videos

Recently there’s a been a lot of curiosity about the strong second quarter turned in by the bond market. Tom discusses two theories that may explain the bond market’s second quarter. These are, of course, just theories because nobody ever discloses their personal reasons for buying or selling securities.

The first theory that we’ve been hearing to explain the strength in bonds during the second quarter has to do with the lackluster first quarter GDP numbers. When an economy shows weakness many investors believe bonds are supposed to be less volatile and safe.

Another theory is that we’ve seen some foreign money flow into US bonds. The European Central Bank has implemented negative interest rates. Meaning that if you leave money on deposit at a bank, you’re actually losing money. Even with rates low here in the US, they are seen as favorable to foreign investors dealing with negative interest rates.

These are just two theories going around right now. Make sure to watch this week’s video to learn more!

Join our Newsletter

Mullooly-Main-Logo

Future-Proof Your Finances

Download the 25-Year Success Strategy

 
Enter your email & get this free PDF download to help you prepare for the next 25 years.  We will send periodic updates as well. Unsubscribe at any time.

You have Successfully Subscribed!

Share This