Schwab Center for Financial Research and Retail Investors

Kathy Jones: Most investors, for example, understand that buying junk bonds, which have low credit ratings in exchange for higher yields, involves taking on more risk, according to Market Watch. But talk about the risk of extended duration and most retail investors won't even know what that is, said Kathy Jones, chief fixed-income strategist at Schwab Center for Financial Research. As a result, they may be taking on a big risk without even realizing it. Yet duration risk has been growing fast across the world and is now cited by analysts as one of the main risks threatening fixed-income portfolios—with Black Rock strategists going as far as calling it one of the reasons that makes the current bond market riskier than the market that preceded the so-called taper tantrum in 2013. That forces investors to buy longer-dated bonds to maintain necessary levels of returns. In short, duration measures how much bond prices change in response to a change in yields . The risk has become more pronounced as government bonds around the world tumble to record lows and, in some cases, negative territory. (news.financializer.com). As reported in the news.