BARBARA: Why bonds are now attractive again - financial expert explains

BARBARA: Why bonds are now attractive again - financial expert explains

According to a report by www.finanzen.net,

There has been a turnaround in the bond market. Rising interest rates have meant that the “TINA” principle has become obsolete and the “BARBARA” principle now applies. The barrier of “Bonds Are Really Back And Really Attractive” means that bonds are becoming more attractive again, especially due to the improved real interest rate, according to asset manager Mathias Beil from Hamburg-based Sutor Bank.

The TINA principle, which states that there is no alternative to a given asset, especially stocks, has held true for years. This was due to central banks' ultra-loose monetary policies, which resulted in historically low interest rates and made bonds unattractive. But rising inflation and the reaction of central banks have led to a rethink, and bonds are now becoming more attractive again.

The switch to the BARBARA principle means that investors can once again achieve positive returns, particularly due to rising real interest rates. However, Beil warns that caution is also required on the bond market and investors should pay attention to the quality of the bonds.

The possible impact on the market is the increasing attractiveness of bonds and a change in investment strategy, as traditionally risk-averse investors now find an alternative to stocks again. The recession also plays a crucial role here. If this occurs, refinancing costs could rise and defaults in the bond market could occur.

The impact on consumers is mixed, as the increasing attractiveness of bonds could lead to a more diversified investment strategy, but also increased risks from bonds with poor credit ratings. The quality aspects are therefore of central importance.

These developments also have an impact on the industry, as asset managers and investors have to adapt their strategies to meet new market demands. The increasing attractiveness of bonds requires a reassessment of investment portfolios and strategies.

It is therefore important that investors and market observers keep a close eye on developments in the bond market and adapt their investment decisions accordingly. The changes in the TINA and BARBARA principles can have long-term effects on investment and investment strategies.