Quote Of The Week: A Bear Market In Bonds Is “A Smaller Bear”


What’s the difference between a bear market in bonds and a bear market in stocks? It’s the difference between a koala bear and a grizzly, says J.P. Morgan’s David Kelly.

“A bear market in bonds is not the same thing as a bear market in stocks. The last two bear markets in stocks, we were down about 50%. A bear market in bonds is a loss of somewhere between 5% and 10%.

The difference between a bear market in stocks and a bear market in bonds is the difference between a grizzly bear and a koala bear. It’s a smaller bear.”

Dr. David Kelly, Chief Global Strategist for J.P. Morgan Funds, as interviewed at the Morningstar Investment Conference, June 25, 2015

The Takeaway: The outlook for bond returns may not be exciting, but it’s a good time to remind ourselves why most investors should own bonds. On average, bonds have less downside risk than stocks. If something goes wrong with your stock portfolio, says Kelly, bonds will help protect you.

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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