A little perspective on the bond market

For long time clients, especially trustees of pension plans, health and welfare plans and strike funds, the title photo might look very familiar. For me, I love it. Not only is it helpful to look at the different bond maturities relative to one another over time, but it brings my Mom to mind.

I used to come crashing into her office at Turnbull and Turnbull on North Main, my hands sticky and covered in powdered sugar from the Tim’s doughnuts in the kitchen. I’d look them over, and Mom would tell me what I was admiring before I’d ask for money or the car or something else.

Mom managed fixed income portfolios for labour organizations and she plotted these charts by hand everyday. She taped them to her office wall and studied the way the 10-year bond moved versus the 30-year, the 5-year, etc. Were corporate bonds better than GICs or government bonds? At that time, GICs were paying upwards of 5%. It’s ok, I’m not giving anything away, Hannah is proud of all her accomplishments in her 35+year career and she should be.

She was studying to become a CFA while I was a teenager. For anyone that earned their CFA as a single parent, you should get 2! Or maybe a golden one or something that shows how hard you had to work to stay focused on your goal.

Bond markets tend to show what is coming in the markets overall. An inverted curve points to recession, a normal curve points to economic growth, etc. That’s a pretty wide swath and there are those that would say those rules of thumb were only valid in a 20th century industrialized environment. Hannah (Mom), Katie and I still look at the bond markets in this way because it helps us clarify what changes came from what rate decisions….what happened when major political and economical actions were taken. It helps us identify opportunities to trade to earn more yield for our clients.

Want to learn more about bond investing? Are you looking for a Portfolio Manager that understands active bond trading? Click on either link to send a message or book a time to talk right here