Image Credit: Alex Nabaum
By Jason Zweig | April 10, 2020 10:00 am ET
Floating-rate funds have taken on water.
These funds are meant to protect against rising interest rates while paying high income and preserving capital. They sank in the first quarter as coronavirus locked down the economy and the Federal Reserve snuffed out the notion interest rates will rise anytime soon.
Most floating-rate portfolios for individual investors are structured as mutual funds or closed-end funds. Those mutual funds lost an average of 12.5% in the first quarter, according to Morningstar Inc. Their closed-end counterparts fell 18.3%.…
To read the rest of the column:
https://www.wsj.com/articles/when-you-guard-against-one-risk-you-can-create-another-11586527209
For further reading:
Books:
Benjamin Graham, The Intelligent Investor
Jason Zweig,The Devil’s Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
Articles and other resources: