Scared of Long Bonds? Get Used to Them
It is no wonder that so many long-term bond auctions are turning into nail-biters — not just in the US, but in Japan and Europe, too. After all, who'd buy long-term bonds? Long-term interest rates have become much less predictable, and that means volatile prices for long bonds. Even worse, the normal negative correlation between the bond and stock markets has become less of a sure thing.
Nevertheless, to answer the question: Just about everyone should buy long-term bonds. They may be the best hedge in an increasingly uncertain environment.
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