Portraits of Tim Buckley, Vanguard’s chief executive officer, and Greg Davis, Vanguard’s chief investment officer.
Investment types

Bonds resurface as attractive asset

1 minute watch   •   March 19, 2024
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Investment types
Bonds
Interest rates
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Along with rising interest rates, bonds are resurging as an appealing investing opportunity. In this webcast excerpt, Vanguard CEO Tim Buckley and Chief Investment Officer Greg Davis highlight the role that bonds play for investors and the prospect that they'll grow over time.

This excerpt is one in a series featuring key takeaways from Vanguard's A Look Ahead to 2024 webcast. Other topics:

  • The traditional 60/40 portfolio and how to adjust it if needed.
  • Why Vanguard is focused on advice.
  • AI's impact on the economy and Vanguard.
Headshots of Tim Buckley and Greg Davis with red background
Bonds are back
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Transcript

Tim Buckley: Maybe you want to talk about why you keep clamoring that bonds are back?

Greg Davis: It's a great thing for investors, right? I mean, at the end of the day we talk a little bit about money markets already, right? That you're actually earning a real yield and real return, and even in the bond market you're actually seeing people getting compensated for investing, and it's incentivizing people to save and invest. I mean, it's very difficult to incentivize people when you're looking at 10-year bonds at 1.5% or 2.0%. Why would you buy that as an asset class?

Tim Buckley: You would just be buying it for ballast, as in something I can rebalance, or rebalance my portfolio with.

Greg Davis: That's exactly right, but in terms of that, a viable asset class that you would expect will grow over time and help compound returns for your long-term retirement or other savings needs. The fact that we've seen this rise in interest rates has now made this asset class a lot more attractive, and so it's a much more exciting asset class today than it has been for the last 10 to 15 years.

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All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account.

There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Investments in bonds are subject to interest rate, credit, and inflation risk.

Diversification does not ensure a profit or protect against a loss.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.

We recommend that you consult a tax or financial advisor about your individual situation.