Bonds: Consider investment-grade corporate bonds for the yields offered – Charles Schwaab

Collin Martin, a strategist at Charles Schwaab, believes that investment-grade corporate bonds can play an important role in most investors’ portfolios. Prices are likely to remain volatile and additional price declines are possible.

Key quotes  

“Consider investment-grade corporate bonds for the yields they offer, not for near-term price appreciation. Prices may move modestly lower, and once stabilized, we don’t necessarily expect a sharp, v-shaped recovery.”

“Continue to move up in credit quality. We still favor credit ratings of A or above.”

“For those who hold individual bonds, we still suggest moving up in credit quality. We believe that many Baa rated corporate bonds will be downgraded to junk.”

“If you’re considering investment-grade corporate bonds today, you may want to use dollar-cost averaging to increase your exposure.”