The consensus for 2007 was that there would be anywhere from two to five interest rate cuts, and to date there have seen zero. This illustrates very clearly how important it is to focus more on steadily improving your own bond portfolio's performance rather than trying to outguess the market. There are two simple portfolio management tools, however, that can improve your odds at being vaguely right on interest rates rather than precisely wrong. Tool number one involves using your portfolio's current yield and average maturity - its basis - as a benchmark for deciding what term of bonds to purchase. Tool number two involves using the gain or loss in the market value of your bond portfolio as a confidence builder to reinforce tool number one. The larger the gain or loss in your portfolio, the more you should pay attention to the term of bonds you select.

Federal Reserve monetary policy
Bond markets