Schwab's Jones Sees 'Room Still' for Yields to Fall

The video discusses the potential for total return in the next 12 months, focusing on the coupon as the primary source of return. It highlights the possibility of yields falling slightly, especially if the Federal Reserve continues to hike rates, leading to deep curve inversions. The discussion then shifts to investment-grade corporate bonds, noting the potential for spread tightening and appreciation. The Bloomberg corporate index is referenced, indicating a yield of over 5%, which is considered a good yield to lock in with a duration of six or seven years.

What is the primary source of return expected over the next 12 months according to the speaker?

• Dividend income

• Stock appreciation

• Capital gains

• Coupon payments

What factor might limit the potential for yields to fall significantly?

• Increased bond issuance

• Decreasing demand for bonds

• Federal Reserve rate hikes

• Rising inflation

In the investment grade corporate bond space, what opportunity does the speaker highlight?

• Increased bond defaults

• Spread tightening and appreciation

• Higher coupon rates

• Longer bond durations

What historical context does the speaker provide regarding bond yields?

• Yields have been stable since the 2000s

• Yields have been declining since the 1990s

• Yields have been volatile since the 1980s

• Yields have been tracked since Nixon's presidency

What is the approximate yield of the Bloomberg corporate index mentioned by the speaker?

• 5.3%

• 6.0%

• 5.0%

• 4.5%