Is now the time to for selling up on bonds?

It is enough to give you vertigo. Corporate bonds have had a wonderful six months.

Many bonds yielding, say, 8% or 9% in March this year are now yielding around 6% or 7%. With yields falling, the capital gain is tremendous – in some cases as much as 30% or more. This is purely a correction from the massively oversold position in the eye of the storm. So, is it time to sell bonds? If you are expecting more equity-style returns from bonds, the answer is probably yes. Those who have invested in more adventurous bond funds might well expect to see a measure of short-term profit-taking after this very strong rally. High yield bonds are up some 50% and may also be vulnerable...