Over the past five years, bond yields have made a round trip, falling to record lows during the pandemic and then rebounding with the strong economic recovery. More recently, inflation has forced the Federal Reserve and other central banks to tighten policy aggressively, pushing yields higher.

Despite the challenging environment, we believe this adjustment in yields has created opportunities for long-term investors. High-quality bonds can still offer valuable income and diversification benefits within a balanced portfolio.

Let’s revisit the case for bonds with some perspective on seven key questions:

Source: FactSet, 6/29/2018 – 6/23/2023. Past performance does not guarantee future results.

7 questions about bonds to consider

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The Investment Policy Committee (IPC) defines and upholds Edward Jones investment philosophy, which is grounded in the principles of quality, diversification and a long-term focus.

The IPC meets regularly to talk about the markets, the economy and the current environment, propose new policies and review existing guidance - all with your financial needs at the center.

The IPC members - experts in economics, market strategy, asset allocation and financial solutions - each bring a unique perspective to developing recommendations that can help you achieve your financial goals.

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Important Information:

*Reinvestment risk is the risk that when a fixed-income security matures, investors may be required to reinvest the principal at a lower rate than the previous investment.

This is for informational purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice.

Before investing in bonds, you should understand the risks involved, including credit risk and market risk. Bond investments are also subject to interest rate risk such that when interest rates rise, the prices of bonds can decrease, and the investor can lose principal value if the investment is sold prior to maturity.

Investors should understand the risks involved in owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal.

Past performance does not guarantee future results.

Market indexes are unmanaged and cannot be invested into directly and are not meant to depict an actual investment.

Diversification does not guarantee a profit or protect against loss in declining markets.

Systematic investing does not guarantee a profit or protect against loss. Investors should consider their willingness to keep investing when share prices are declining.

Dividends may be increased, decreased or eliminated at any time without notice.

Special risks are inherent in international investing, including those related to currency fluctuations and foreign political and economic events.