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October 27, 2014

Here's what to expect from bond mutual funds

  • Yields are lower, risks are higher and it may be difficult for bonds to replicate this year's returns.
  • By STAN CHOE
    AP Business Writer

    NEW YORK — Oh, right. Stability. That's what bond mutual funds are for.

    When stock markets tumbled around the world, bond funds remained solid once again. They continued to inch ahead, while stock indexes swung up and down by more than 1 percent for five straight days. So many investors poured money into bonds in search of safety that the yield on the 10-year Treasury note temporarily dropped below 2 percent for the first time in more than a year. Yields for bonds drop when demand increases and their prices rise.


     
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