2011 was the year, it was unanimously agreed, when interest rates would finally start to rise. Bond media personalities lectured and hectored the world on the low level of yields and the obvious investment insanity of owning bonds. The problem was, as is shown in the chart below, bond yields fell dramatically in 2011 and proved the investment talking heads wrong once again. As always, the consensus for higher interest rates existed to give investors a place of psychological comfort to share with the investment herd. As is quite often the case, this investment place of comfort proved very uncomfortable as things turned out far differently than the shared expectation.
Read the full newsletter at the link below.Canso January 2012 Corporate Bond Newsletter