Passive investing is not a passive exercise
WEEKLY MARKET COMMENTARY |
There are beneﬁts with both active and passive investing. However, passive investing is not a passive exercise. As with all components of investing, due diligence and care are required to manage risk prudently.
In light of the Federal Open Markets Committee’s projection to raise interest rates three times in 2017, U.S. investment-grade bonds provide an example for the need of active diligence with passive investing. While there are numerous other risks to consider when investing in ﬁxed income securities, this week’s market commentary will discuss interest rate risk, otherwise known as duration.