As investors have recently rediscovered, stocks have risks. So do bonds.

When Fed Chairman Jerome Powell recently hinted his agency could boost rates as many as four times this year, volatility ensued. The stock turbulence demonstrated that weakness may be looming for bonds, as well.

“One of the biggest misconceptions investors have is thinking that their portfolios are safe because they are mostly invested in bond funds,” says Ron Weiner, managing director of RDM Financial Group at HighTower in Westport, Connecticut.

Clients may soon be in for a “rude awakening” he warns. Rising bond yields coupled with relatively high fees hidden inside a number of fixed-income investment vehicles, could lead to some underwhelming returns for bond funds this year, Weiner says.

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Written By: Donald Jay Korn

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