After a few difficult years, fixed income may be getting its groove back in 2026.
The inflation shocks from the COVID-19 era are in the rearview, and the positive correlation that occurred between fixed income and equities turned negative last year. That’s good news for diversified portfolios. Plus, the Federal Reserve may be in easing mode for monetary policy, but interest rates aren’t likely to return to pre-COVID levels where they were near zero, said Eric Sterner, chief investment officer of Apollon Wealth Management. “We think there’s going to be a lot more value to those fixed-income allocations moving forward, which is music to our ears — and I’m sure all investors,” he said.
So advisors are going all in on fixed income, but of course, tailoring their guidance; portfolio construction is always client-specific. There is a general theme several advisors are following this year, however: Stick to quality. “You don’t have to stretch much to get good income,” said Brian Schaefer, portfolio manager at Johnson Financial Group.
thedailyupside.com
by Debbie Carlson