Rate accompli: Are rising interest rates bad for all assets?
Many Happy Returns
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Can You Avoid Duration Risk by Floating Rate Bonds?
In a rising rate environment you want as short a duration bond as possible if you're going to own any bonds. Fixed income managers will be doing what they do when interest rates are rising or falling: shorten duration and lengthen duration. You can kind of think of it using a sailing analogy where imagine you're sailing if there's a storm comingyou're going to fill the sail but if there's just a light breeze you'll unleash all of the sailYou've lost me I've never sailed. But at the moment obviously all of these bond fund managers will be furling the main sail because if there is a storm coming then you don't want that duration risk. And can you avoid duration
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