3 Defensive Stock Alternatives to Bonds If Interest Rates Drop

Bonds play a central role in the investment strategies of many defensive or conservative investors. The price of bonds shifts in an inverse fashion compared to yields, meaning that as the Federal Reserve sets a higher interest rate, bond prices tend to fall. Similarly, when the Fed reduces rates—as investors have anticipated for months—lower yields mean that bond prices tend to rise.This can be a boon for bond investors as it makes fixed-rate bonds issued prior to the Fed's decision to lower rates suddenly ...