Here Are the Bonds for Your Portfolio In the Second Half 2019

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The G-20 meeting between Trump and China's leader Xi Jinping spelled positive news for trade, but many still see economic data remaining where it's been. 

That means, as treasury yields rise, they could soon become a nice pick up for defensive investors. 

Even though there will be no added tariffs on either side for the foreseeable future, economic growth and inflation still may not move much higher. Will the Federal Reserve still cut interest rates? "Absolutely. I believe so," Marc Pfeffer, chief investment strategist for CLS Investments said. "The data has been weakening for the last several months, the inflation, certainly that picture has been weaker [sub 2%]," he added. "I don't think that this [G-20 talks] necessarily changes anything."

Meanwhile, the ten year treasury yield has risen to 2.028%, as investors are slightly more optimistic on growth and inflation for the moment, but Pfeffer likes the short end of the yield curve for now, as the ten year still doesn't offer great real return. 

Here's when it would offer such a return:

"At this point, if it backs up by 25 to 50 basis points," treasuries would pose little interest rate risk and a strong real yield. "Let's say two and a quarter to two fifty is a good entry point."

But here's where Pfeffer says is a good place to buy right now:

"Investment grade corporate bonds with high quality bonds is probably the best place to go if you're looking for income with safety, but even that market is a little bit expensive right now," he said. S&P 500 corporate bond prices have risen about 9% year-to-date. Elsewhere, Pfeffer likes emerging market debt. 

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