About This Episode
Few of the advisors who will listen to this podcast have had professional careers that spanned a period of rising interest rates. But rates have been rising, and passive allocations to bonds or stocks cannot be counted on to provide the same results they did for the last 40 years. Given that regime change, my guest today is here to discuss what should be the appropriate allocation to fixed income in a multi-asset portfolio. We will discuss how advisors should think about liquidity in their bond allocations, and to what extent tactical adjustments will be needed.

To learn more visit:

Here are some more helpful links:
➤ The 360 evaluator tool –
➤The iBonds ladder tool –
➤The recent iShares fixed income whitepaper, “The Great Reset” –

#Bondallocations #Fixedincome…(read more)

HOW TO: Hedge Against Inflation

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Episode 354: Karen Veraa of Blackrock on Bond Allocations That Protect Against Inflation

Inflation is a persistent concern for investors, particularly those aiming to preserve the value of their investments over time. Bonds have long been considered a safe haven for investors seeking to protect against inflation, and in Episode 354 of the popular finance podcast, Karen Veraa of Blackrock discusses bond allocations that can effectively shield portfolios against the erosive impact of inflation.

As an expert in fixed income investments and macro strategy, Karen Veraa brings a wealth of knowledge and experience to the topic. In her conversation with the podcast host, she highlights the different types of bonds that can serve as a hedge against inflation, as well as the strategies investors can employ to effectively protect their portfolios.

One key bond allocation strategy discussed by Veraa is investing in Treasury Inflation-Protected Securities (TIPS). These bonds are specifically designed to provide protection against inflation by adjusting their principal value based on changes in the consumer price index (CPI). In other words, as inflation rises, the value of TIPS increases, thus keeping investors’ purchasing power intact. Veraa explains that TIPS can be an essential component of a well-diversified portfolio, and she offers guidance on how investors can optimize their TIPS allocations based on their risk appetite and investment objectives.

Another bond allocation strategy that Veraa highlights involves investing in floating-rate bonds or adjustable-rate notes. These bonds have variable interest rates that reset periodically based on a reference rate, typically a short-term interest rate benchmark. By investing in floating-rate bonds, investors can benefit from rising interest rates, which often accompany periods of inflation. Veraa points out that while floating-rate bonds can be a valuable allocation for investors looking to protect against inflation, it’s essential to strike a balance between fixed-rate and floating-rate bonds to manage risk effectively.

Throughout the episode, Karen Veraa also provides valuable insights into the impact of central bank policies and geopolitical events on inflation and bond markets. She highlights the importance of staying up to date with economic indicators, like inflation reports and central bank announcements, to make informed investment decisions.

As the episode concludes, Karen Veraa emphasizes the need for individual investors to consult with financial advisors or professionals who can help tailor bond allocations to their specific financial goals. While bonds can be a useful tool in protecting against inflation, the right mix of asset classes will vary depending on an investor’s risk tolerance, time horizon, and total portfolio construction.

Episode 354 of the finance podcast featuring Karen Veraa sheds light on the importance of bond allocations that protect against inflation. Understanding how different types of bonds can serve as an effective hedge and implementing the right strategies can significantly safeguard portfolios in the face of rising prices. As investors navigate uncertain economic conditions, the insights provided by experts like Veraa are invaluable in guiding individuals towards optimal investment decisions.