US Treasury yields (^TYX, ^TNX, ^FVX) have surged recently, with the 10-year yield inching towards 5%. Now, investors question if it’s a good time to invest in bonds.
Tom Tzitzouris, Managing Director and Head of Fixed Income Research at Strategas Securities, joins Wealth to weigh in.
Tzitzouris shares that despite further upside risk in yields, the “sweet spot” for long-term bond investors is in the 5 to 10-year range.
“A year from now, the yield curve is so upward sloping that for the most part, you’re actually pricing in price gains on top of the yield you’re picking up,” Tzitzouris says. He explains this is due to “lower duration yields being below longer duration yields.”
Tzitzouris also gives advice for younger investors, advising a for a more modest bond allocation “less than 20%.”
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