Why Schwab's Kathy Jones Likes Munis, Not High-Yield

The video discusses current trends in the bond market, focusing on strategies for increasing income through longer duration bonds and municipal bonds. It highlights the risks associated with high yield bonds, especially during the end of a rate hike cycle. The video also explores the challenges of recovering from losses in bond markets compared to equities, emphasizing the importance of holding bonds to maturity and reinvesting in bond funds.

What is the suggested strategy for investors as bond yields rise?

• Focus on high-yield bonds

• Sell all bond holdings

• Gradually add longer duration bonds

• Invest in short-term bonds

Which type of bonds are considered attractive for high-income earners on a tax-equivalent basis?

• Municipal bonds

• Foreign bonds

• Corporate bonds

• High-yield bonds

Why is caution advised in the high-yield bond sector?

• High yields are always risky

• It's the beginning of the rate hike cycle

• The economy is strengthening

• High-yield bonds perform poorly at the end of the rate hike cycle

How can investors recover losses in the bond market?

• By holding individual bonds to maturity

• By selling bonds at a loss

• By investing in stocks

• By switching to high-yield bonds

What is a key difference between recovering losses in bonds and equities?

• Bonds have higher growth potential

• Bonds can be held to maturity for principal recovery

• Equities provide guaranteed returns

• Equities are less volatile