One last rant and I'll (try to) stop. Yes, but the purveyors of "bond crash" rhetoric use interest rate risk as their reason for why bonds are dangerous. Look at the Siegel and Schwartz article and tell me where inflation is mentioned. It isn't.Rodc wrote:It is what it is. It was what happened.Yes, but again, it really muddies the waters when one mixes up inflation risk and interest risk. You are talking about a combination of interest rate effects and inflation rate effects.
The situation is complex. It is interesting to try to discuss it from as many viewpoints as possible. Inflation risk is very serious. TIPS exist. But the argument that "a crash far more serious than the tech crash is inevitable because interest rates must rise" is simplistic and gets in the way of accurately judging the situation.
Are you trying to tell me that a 15% drop is to be considered as properly described by "far more serious consequences for investors" than a 70% tech stock drop?Doc wrote:nisi wrote:Do you remember a bond "crash" during that period of time? Me, neither.
I guess it all depends on the postion of the observer.
Vanguard Intermediate down 15% (blue), Vanguard TIPS down 15% (green), Vanguard Intermediate Treasuries (orange) not so much.
So if you only look at Total Bond Market and only look at growth where the dividends offset the price drop you can't see the trees for the forest. And if you never try to rebalance into equites when the equity market tanks you don't give a RA anyway so why bother to look at anything?