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Schwab Investing Brief

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Dollar Decline: Time to Shift to International Bonds? Maybe Not
by Kathy A Jones
July 12, 2017

The U.S. dollar weakened in the first half of 2017, leading some investors to wonder whether a key attraction of U.S. bonds is likely to fade away—and whether they should consider investing in international developed market bonds instead. Here’s what investors should know.

Corporate Bond Market Mid-Year Outlook: Further Price Gains Unlikely This Year
by Collin Martin
July 06, 2017

Rising prices drove corporate fixed income returns in the first half of the year, but don’t expect that to continue. Coupon payments will likely drive returns the rest of the year

Muni Bond Market Mid-Year Outlook: Why the Strong 2017 Performance Likely Won’t Continue
by Cooper J Howard
July 05, 2017

Muni bonds have posted solid returns in 2017. Less-attractive valuations and the prospects of tax reform could pose a challenge in the second half.

Bond Market Mid-Year Outlook: Redefining the Borders of ‘Lower for Longer’
by Kathy A Jones
June 16, 2017

In the second half of 2017, we expect10-year Treasury yields to remain in a 2% to 2.5% range, consistent with the eight-year “lower for longer” theme in the bond market.

Fed Raises Rates, Sticks With Plans for One More Hike This Year
by Kathy A Jones
June 14, 2017

As expected, the Federal Reserve raised its benchmark target rate at its June meeting. However, the market seems less concerned about inflation than the Fed does. 

Corporate Bonds vs. Municipal Bonds: What Investors Should Know
by Cooper J Howard and Collin Martin
June 07, 2017

How do you choose between municipal bonds and investment grade corporate bonds? The answer isn’t always straightforward.

Retirement Savings Milestones: How Much Should You Have Now?
by Rob Williams
June 02, 2017

Measuring progress toward your retirement goals isn’t easy, so we created some milestones you can use to see how your savings stack up.

Will the Fed Reduce Its Balance Sheet? What Bond Investors Should Know
by Kathy A Jones
June 01, 2017

The Federal Reserve may soon announce plans to reduce the size of its balance sheet. What does that mean, and should bond investors be concerned?

6 Things Investors Should Know About Municipal Bond Insurance
by Cooper J Howard
May 04, 2017

The number of newly issued munis carrying  insurance has climbed over the past few years. What should investors know about municipal bond insurance?

Three Reasons to Own Bonds When the Fed is Raising Interest Rates
by Kathy A Jones
April 19, 2017

Even in a rising rate environment, bonds can offer three key benefits: diversification, capital preservation and income.

What Investors Should Know About the High-Yield Bond Rally
by Collin Martin
April 11, 2017

While high-yield bond prices have risen sharply over the past year, investors should be mindful of potential risks, such as low oil prices.

Emerging Market Bonds: Can the Hot Start In 2017 Continue?
by Kathy A Jones
April 06, 2017

Emerging market bond prices have surged in 2017, but valuations are stretched and risks remain.

Not Always Tax Free: 7 Municipal Bond Tax Traps
by Cooper J Howard and Rob Williams
April 04, 2017

If you're interested in tax-free municipal bonds, you might want to keep an eye out for these seven tax traps.

Is Your State Muni Bond Fund Investing Elsewhere? Why It Matters
by Cooper J Howard
March 13, 2017

While it’s common for fund managers to invest in out-of-state bonds, a large allocation to territories with declining credit conditions could be concerning. 

What You Should Know About Convertible Bonds
by Collin Martin
March 08, 2017

Convertible bonds may generate attractive returns when stocks rise, but they differ greatly from traditional fixed income investments.

Closed-End Bond Funds: How They Work and What You Should Know As Rates Rise
by Kathy A Jones
March 02, 2017

Closed-end bond funds are a popular way for investors to garner extra yield when interest rates are low, but rising rates can negatively affect their performance. Here’s what you should know about these investments.

What would a shake-up at the Fed mean for bond investors?
by Kathy A Jones
February 28, 2017

Significant turnover will likely hit the Fed in the next few years. The changes may result in a shift in the way the Fed sets policy. 

Should Muni Investors Be Concerned About Pensions?
by Cooper J Howard
February 07, 2017

Dallas recently joined the list of major cities to see its credit ratings downgraded in the face of pension struggles. What does it mean for muni investors?  

Corporate Defaults: What Investors Should Know When A Bond Issuer Goes Bankrupt
by Collin Martin
February 02, 2017

With the corporate default rate rising, investors may be wondering what they should do if their corporate bond issuer goes bankrupt.

Short-Term Bonds: Why They Could Outperform As Interest Rates Rise
by Cooper J Howard and Rob Williams
February 02, 2017

Bonds with shorter durations may outperform medium-term and long-term bonds if the Federal Reserve continues to raise interest rates.

Anatomy of a Bond Bear Market: What to Look For When Yields Rise
by Kathy A Jones
January 19, 2017

With yields surging from last summer’s record lows, are bonds at the start of a long-term bear market? To answer that question, you must first determine what constitutes a bear market in bonds.

Discount Munis: What You Need to Know About Taxes
by Cooper J Howard
January 13, 2017

Municipal bonds can offer tax-free income, but bonds purchased at discounted prices could be subject to variable tax rates.

Floaters vs. Bank Loans: What You Should Know as Rates Rise
by Collin Martin
January 10, 2017

Rising interest rates add to the appeal of floating-rate coupons, but not all investments in this category offer the same risks and rewards.

Will the U.S. Dollar Bull Market Continue in 2017?
by Kathy A Jones
January 05, 2017

The U.S. dollar looks set to continue rising this year, but the risks to the rally increase as the bull market ages.

Inflation Is Rising: Time to Consider Treasury-Inflation Protected Securities?
by Collin Martin
December 20, 2016

Inflation is trending higher and TIPS are still priced below their historical averages. Is now the time to consider some inflation protection? 

Changing Conditions: A Bond Market FAQ
by Kathy A Jones
December 13, 2016

Yields have surged and potential changes in taxes, government spending and interest rates could make the bond market more volatile. What does it mean to investors?

Corporate Bonds: Income May Drive Potential Returns in 2017
by Collin Martin
December 08, 2016

With yields poised to rise, income payments—rather than price gains—may drive potential total returns in the corporate bond market in 2017.

Bond Market Outlook: Higher Rates and Known Unknowns
by Kathy A Jones
December 01, 2016

The incoming administration’s proposals for taxes, spending and trade could create waves in the bond market. Caution may be in order.

Muni Bonds: Making Sense of the Post-Election Landscape
by Cooper J Howard and Rob Williams
November 22, 2016

The potential for lower taxes and an increase in infrastructure spending could hurt muni prices in the short term, but we still feel they can make sense for high-income earners.

Can Bond Funds Make Sense When Interest Rates Rise?
by Rob Williams
November 17, 2016

Bond funds can experience price swings when interest rates rise, but potentially higher total returns over time can help you recover.

Premium Bonds: What’s the Attraction?
by Collin Martin
November 15, 2016

Paying more for a bond than you stand to get back at maturity may seem like a losing proposition, but premium bonds can offer attractive returns and price stability.

President Trump and Global Trade: How Will Campaign Promises Play Out?
by Jeffrey Kleintop
November 10, 2016

Even if he carries out his most aggressive campaign proposals, we believe the consequences could be less damaging than they might at first seem.

Change Is in the Air: A Post-Election Look at Bonds
by Kathy A Jones
November 09, 2016

The election results look set to continue the shift toward increased fiscal spending and higher inflation, but some caveats are in order.

Opposing Views: How the Candidates’ Tax Plans Could Affect Muni Bonds
by Cooper J Howard and Rob Williams
October 20, 2016

Donald Trump and Hillary Clinton have put forward very different tax plans. What do those plans mean for municipal bond investors?

Are Bond Yields About to Rise?
by Kathy A Jones
October 06, 2016



Back to School with Municipal Bonds
by Cooper J Howard and Rob Williams
September 27, 2016

School district bonds can bring high credit quality and diversity to a portfolio of municipal bonds.

Quality Check: High-Yield vs. Investment-Grade Bonds
by Collin Martin
September 20, 2016

High valuations and weakening fundamentals suggest the case for high-yield bonds isn’t as compelling as that for investment-grade bonds. Yield seekers rethinking their risk tolerance should take note.  

Is it Time to Consider Bank Loan Funds?
by Collin Martin
August 25, 2016

Bank loans offer relatively high income potential and may actually benefit from a Fed rate hike. But investors should also consider their risks. 

Extra Credit: The Lowdown on Enhancement Programs for School District Bonds
by Cooper J Howard and Rob Williams
August 23, 2016

Looking for extra protection for your school district bonds? Consider munis backed by state credit-enhancement programs.

Munis: How to Invest in Infrastructure-Backed Bonds
by Cooper J Howard and Rob Williams
August 02, 2016

Politicians are talking more about the need to invest in America’s infrastructure. Here’s what you need to know about investing in revenue-backed municipal bonds.

What investors need to know about helicopter money
by Jeffrey Kleintop
June 13, 2016

The return of deflation in Japan has led some to call for the use of “helicopter money” which we see as unlikely to be effective at boosting growth, but may raise the risks to the global financial system.

Waiting for a Fed Rate Hike: Bond Investments That May Make Sense Now
by Collin Martin
June 09, 2016

The Federal Reserve is likely to raise rates again this year, but that doesn’t mean fixed-income investors need to wait on the sidelines for a better entry point.

Bond Ladders: A Useful Tool for Retirement Income
by Rob Williams
April 18, 2016

Bond ladders can help you manage cash needs in retirement, allowing you potentially to take more risk elsewhere in your portfolio.

Looking for Extra Yield? The Case for Preferreds
by Collin Martin
April 11, 2016

Preferreds share characteristics with both stocks and bonds, and offer higher yields than most traditional fixed income investments.

How to Build a Bond Portfolio
by Rob Williams
March 21, 2016

The bond market is large and complex, so it helps to focus on bonds that provide diversification, stability and income. 

Is That High-Yield Bond Too Good to Be True?
by Collin Martin
February 25, 2016

High-yield bonds may look appealing, but they come with additional default and volatility risks.

Corporate Bond Investors: Check Your Sectors
by Collin Martin
February 18, 2016

The recent drop in commodity prices is a reminder that sector risk can shake up the corporate bond market.

Currency Wars: Is a Weaker Currency Good or Bad?
by Michelle Gibley
February 03, 2016

What can currency wars do for an economy?

Investing in Bonds: Should You Choose Individual Bonds or Bond Funds?
by Rob Williams
December 09, 2015

When investing in bonds, should you choose individual bonds or bond funds? Here are a few guidelines.

Getting to Know Pre-Refunded Bonds
by Cooper J Howard
September 10, 2015

Looking for high-credit quality bonds? Consider "Pre-Re's."

Corporate Bonds vs. Municipals: Which Make More Sense Now?
by Rob Williams and Collin Martin
April 29, 2015

With after-tax yields comparable to corporate bonds, are municipals now an opportunity for traditional corporate bond investors? 

How to Create a Sustainable Retirement Spending Plan
by Rob Williams
February 25, 2015

To set up a sustainable retirement spending plan, we recommend tapping multiple sources of cash flow.


Investors should consider carefully information contained in the prospectus, including investing objectives, risks, charges and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing.

Performance may be affected by risks associated with non-diversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income and small capitalization securities. Each individual investor should consider these risks carefully before investing in a particular security or strategy.