Stock Strategist (ETF Edition): Hands-On Tactical Bond Strategies

[Morningstar Logo]( [Company Site]( [Company News]( [Membership]( [Portfolio]( [Stocks]( [Options]( [Funds]( [ETFs]( [Markets]( [Tools]( [Personal Finance]( [Discuss]( Stock Strategist (ETF Edition) Hands-On Tactical Bond Strategies Three strategies to consider, and two to avoid. [tab_bar] by Alex Bryan, CFA | 5/13/2020 6:00:00 AM Tactical bond investing is hard to do well. For most investors, the best approach is to find broadly diversified, low-cost funds with risks they're comfortable taking and to stick with them. That said, there are some strategies, based on value and momentum, worth considering. Here's a closer look at some moves that might be worth making and some to avoid. Strategies Worth Considering 1) Yield-Curve Valuation Timing While long-term bonds almost always offer higher yields than short-term bonds, it pays to favor long-term bonds when this yield spread is wider than usual and short-term bonds when it's narrower than usual. To test this, I created a strategy that held 10-year U.S. Treasuries when the yield spread between the 10- and two-year Treasury equaled or exceeded its average over the past three years. Otherwise, it held two-year Treasuries. I tested this with a one- and three-year holding period. I also tested a version with a five-year lookback. To read more, click [here](. Sponsored Links [Buy a Link Now]( Podcast: Investing Insights From Morningstar.com Listen to a roundup of the latest videos featured on Morningstar.com [in this podcast]( available through iTunes. Free Issue | Morningstar's Stock Newsletter >> Morningstar StockInvestor is celebrating more than 10 successful years of high-quality stock investing. Its two real-money portfolios have outperformed the S&P 500 since 2001. [Get new ideas for the core of your stock portfolio](. Search Most Recent Articles [Where Risk Models Can Miss the Mark]( [Seeking Financial Information? Keep Your Rules in Mind]( [The Best Target-Date Series]( Latest Analyst Reports [Natixis Vaughan Nelson Value Opp A]( [Eaton Vance Income Fund of Boston I]( [Oakmark Global Select Investor]( [Victory Floating Rate Y]( [Eaton Vance Dividend Builder A]( ABOUT OUR EMAIL TO UNSUBSCRIBE this email address to the Stock Strategist newsletter, please click "reply" and then click "send." This will unsubscribe only this email address to this specific newsletter. All subscription changes will take effect within one business day. Replies are not read by individuals, so please do not use this for queries about Morningstar.com. If you have questions about Morningstar.com or your membership, send a note to [joe@morningstar.com](mailto:%20joe@morningstar.com). ABOUT OUR PRIVACY POLICY Please [click here]( to learn about Morningstar's privacy policy. (c) Copyright 2020. Morningstar, Inc. 22 West Washington Chicago, Illinois, 60602 All rights reserved.