Reflections & Resources

Why Bonds are Down and What it Means for your Investment Portfolio

August 10, 2022

For a long time, bonds have been considered one of the safer investments you can make. They tend to perform well when stocks struggle, and they offer a steady stream of income. But lately, bonds have been under pressure. Interest rates are rising, and that is bad news for bond prices.

What does this mean for the future of bonds in your investment portfolio? When it comes to bonds, there are a few things that you need to keep in mind.

First, remember that interest rates and bond prices move in opposite directions. This means when rates go up, bond prices go down. Why? When interest rates rise, investors are willing to pay less for a bond that pays a lower rate of interest than current prevailing rates. For example, let’s say you have Bond ABC that pays 5% interest and is currently worth $100. If interest rates rise to 6%, the value of your bond will fall to $94.44. This discount in price will affect the current market value of the bond, but only becomes a reality if the bond is sold prior to its maturity. This relationship between interest rates and bond prices is important to keep in mind when making investment decisions.
Second, don’t panic. While it is true that bonds are under pressure right now, they still offer some important benefits. For example, bonds can provide stability in a portfolio during periods of high stock market volatility. Additionally, bonds can offer attractive income potential, particularly for investors who are nearing or in retirement. As such, it is important not to make rash decisions about your bond holdings in times of market uncertainty.

While it is certainly true that interest rates have been on the rise in recent months, it is important to remember that this trend will not continue indefinitely. At some point, the Bank of Canada/Federal Reserve will change its interest rate direction and, as a result, bond prices will stabilize.

The bottom line is that bonds can be challenging to own in periods of interest rate increases, but they can still provide stability and liquidity for investors. Bonds may help to offset some of the risk in your portfolio when the stock market is volatile. For these reasons, it is important for many investors to have a mix of both stocks and bonds in their portfolio.

Recent Posts

Beyond ESG Ratings: How We Evaluate Responsible Investments

Beyond ESG ratings: How we evaluate responsible investments

Understanding our responsible investing process

Responsible investing has become an increasingly important part of the investment landscape. As environmental, social, and governance (ESG) investing has become more widely adopted, many investors are surprised to learn that different ESG research organizations often assign different ratings to the same company.

Rather than viewing these differences as a weakness, we believe they reflect the complexity of evaluating corporate sustainability. No single research provider captures every dimension equally well.

For this reason, we developed a proprietary ESG assessment methodology that combines multiple independent sources of research into one disciplined and consistent investment framework.

Why this matters

Responsible investing is about more than simply selecting companies with favourable ESG ratings. It requires a disciplined investment process that balances sustainability considerations with sound financial analysis.

Our methodology is designed to identify companies that demonstrate responsible corporate behaviour while continuing to meet the financial characteristics we believe are important for long-term investment success.

Our layers of ESG due diligence

July 2026 Market Update – Middle East Uncertainty, Central Bank Caution, and Resilient Economic Growth

What happened in July? Geopolitical developments in the Middle East remained an important influence on global markets during July. Renewed military activity involving the United States and Iran contributed to continued uncertainty, while developments surrounding shipping routes and energy infrastructure kept oil markets particularly sensitive to changing events. Oil prices experienced renewed volatility throughout the month, rising following heightened tensions in early July before easing later in the month as markets responded to changing geopolitical developments. Despite the late-month decline, oil prices finished July more than 20 per cent above their levels at the end of February, reflecting the ongoing impact of geopolitical risk on global energy markets. While geopolitical developments remained the primary focus for investors, economic data and central bank decisions continued to shape expectations for inflation and interest rates. The Bank of Canada and the U.S. Federal Reserve both maintained their policy interest rates during July, while inflation data suggested that price pressures remain above central bank targets despite some moderation from recent highs.

Summer 2026 Newsletter – The Wagner Investment Management Team

As we move through summer 2026, it’s a great time to take a step back from the headlines and focus on the bigger picture of your financial plan.

Discover how evolving market dynamics are shaping the investing landscape, explore the lessons that Jevons Paradox may offer for energy markets and artificial intelligence, and learn practical ways to support the next generation through homeownership, tax planning, and financial education. Plus, gain valuable estate-planning insights on navigating the transition when children reach adulthood.

Let’s make this summer a season of perspective, preparation, and opportunity – helping you stay focused on your long-term goals while we continue to navigate changing markets together.

June 2026 Market Update – Middle East Tensions, Oil Price Swings, and Easing Energy Concerns

Geopolitical tensions in the Middle East remained a key influence on global markets during June. Developments involving the U.S., Iran, Israel, Gaza, and Lebanon contributed to periods of heightened uncertainty, particularly in energy markets. Concerns surrounding shipping through the Strait of Hormuz, a key global oil transit route, led to temporary increases in oil prices during the month. However, as tensions eased, oil prices retreated approximately 30 per cent from their June 3 intraday high, ending the month near where they finished in late February.

Mid Year Market Update – June 2026

The markets have given investors plenty to think about during the first half of 2026.

The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact your financial advisor.