A Slower Taper Means Higher Yields, Schwab’s Jones Says

The video discusses strategies for savers facing low yields, emphasizing the importance of a diversified portfolio. It explores the effects of tapering bond stimulus by the Federal Reserve and ECB on yields and inflation. The conversation highlights market skepticism, strong demand for yields, and the influence of foreign investors. The role of fiscal support in the economic outlook is examined, along with interactions between equity and bond markets. The discussion concludes with considerations for retirees and the potential for bonds to act as a buffer in portfolios.

What is a key strategy for savers dealing with low nominal and real yields?

• Maintaining a diversified portfolio

• Avoiding all investments

• Focusing on high-risk stocks

• Investing solely in traditional Treasurys

How does the pace of tapering bond stimulus affect bond yields?

• Tapering has no effect on yields

• Slower tapering leads to higher yields

• Faster tapering leads to higher yields

• Tapering always decreases yields

What is one reason for the market's skepticism about inflation targets?

• The Fed's consistent success in meeting targets

• A 20-year history of missing inflation targets

• High confidence in economic growth

• Lack of demand for yields

What role do foreign investors play in the bond market?

• They contribute to the demand for bonds

• They only invest in domestic bonds

• They decrease the demand for bonds

• They have no impact on yield spreads

What is considered a major game changer in the current market?

• Monetary policy

• Fiscal stimulus

• High inflation rates

• Low unemployment rates

How can bonds serve in a balanced portfolio?

• As a high-risk investment

• As a buffer against stock market volatility

• As a means to avoid all risks

• As the sole investment option

What concern do equity strategists have regarding yields?

• Yields are not moving up as quickly as inflation

• Yields have no impact on equities

• Yields are consistently high

• Yields are moving up too quickly