- On Multi-Asset Investing
- Help Your Clients Overcome the Opportunity Cost of Cash
- Low duration fixed income may help improve outcomes.
- 2022-06-07 14:47
- Key Insights
- Many investors use bank deposits or money market funds to avoid drawdown risk. This may come at the opportunity cost of sacrificing potentially higher returns.
- Accepting a relatively small amount of volatility calibrated to an investor’s liquidity needs may have a significant impact on returns.
- Low duration fixed income may help your clients improve outcomes for this lowest‑risk portion of their portfolios.
- Your clients could potentially benefit from reinvesting in higher-yielding bonds, which may help offset bond price declines.
This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision.
The views contained herein are those of the authors as of June 2022 and are subject to change without notice; these views may differ from those of other T. Rowe Price associates.
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Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy.
Past performance is not a reliable indicator of future performance. All investments are subject to market risk, including the possible loss of principal. All charts and tables are shown for illustrative purposes only.