At the end of January 2025, $7 trillion was invested in money market funds, according to the Investment Company Institute. Some of this cash has been on the sidelines waiting for a better time to return to the bond market. Now might be that time. Here are three reasons:
- High-quality, investment-grade bonds offer attractive yields without taking a lot of credit risk.
- Historically, bonds have appreciated in value over five-year periods relative to cash.
- During periods of stock market volatility, bonds provided a portfolio with diversification benefits.
Cash can be a good way to save for the short term and earn moderate interest. But bonds can offer your portfolio something different. The question isn’t whether to invest in cash or bonds; it’s what’s the most appropriate balance between the two for your clients?
Learn more in the video below.
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