The Bond Market in 2020: What Investors Need to Know

The video discusses the importance of fixed income investments in a low yield environment, emphasizing strategic allocation and risk management. It advises against cash allocation in negative yield scenarios and suggests exploring investment themes. A barbell approach is recommended for diversification, focusing on Treasurys and emerging market bonds, particularly in Asia.

Why is it important to justify holdings of negative fixed income yield?

• To maximize short-term profits

• To ensure high returns in a volatile market

• To avoid geopolitical tensions

• To diversify the portfolio and balance risks

What is a potential drawback of allocating to cash in a negative yield environment?

• It limits diversification opportunities

• It leads to higher inflation

• It may result in lower returns after inflation

• It increases exposure to market volatility

What should investors focus on in a low growth environment?

• Taking more risks with a buffer

• Focusing only on short-term gains

• Investing solely in cash

• Avoiding all fixed income investments

What is the barbell approach in fixed income diversification?

• Avoiding all currency risks

• Focusing solely on corporate bonds

• Balancing between US Treasuries and emerging market bonds

• Investing only in high-risk assets

Why might US Treasuries still be attractive to European investors?

• Because of the high volatility in the US market

• Because of the expected weakening of the US dollar

• Due to a forecasted massive change in the currency spectrum

• As they remain the highest yielding top 10 currency