Bottom hit for bond market?

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ChinchillaWhiplash
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Bottom hit for bond market?

Post by ChinchillaWhiplash » Wed Jun 13, 2018 12:05 pm

I've noticed that even when treasury yields are rising, total bond funds such as BND etf have stable or rising prices too. This was not the case prior to about 2 weeks ago. Are people starting to move more $s into bonds or something? Should we see more upswing in bond index funds soon? Just curious. Doesn't change my strategy. So don't worry, keeping my AA as is.

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JoMoney
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Re: Bottom hit for bond market?

Post by JoMoney » Wed Jun 13, 2018 1:34 pm

Here's a thought:
You make money in bonds in the coupon yield. At maturity, you only get back the principal.
Maybe you should hope people get out of bonds, so higher yields have to be offered to attract investors.
If you're invested in bonds that you plan to sell before maturity, you might get a short-term boost if yields fall, but that's a fleeting short-term gain... and unless you're planning on spending it, you then have to figure out what to do with the money.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Artful Dodger
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Re: Bottom hit for bond market?

Post by Artful Dodger » Wed Jun 13, 2018 2:44 pm

With the exception of the last four weeks, all the BND returns for the past year are negative. Down about 2% YTD, down 2% for the last 6 months, and down a little more than 1% for the past 12 months. I believe, as long as the Fed continues to raise rates, BND, and other funds will continue to show some decline as the face value of their bonds will continue to decline. In time, as bonds are bought with higher yields, the fund value will recover, but we could be looking at pretty anemic returns for the near future.

I've been buying a mix of AA or higher rated bonds with 2 and 3 year maturities, with 3% as my return.

MnD
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Re: Bottom hit for bond market?

Post by MnD » Wed Jun 13, 2018 2:52 pm

Artful Dodger wrote:
Wed Jun 13, 2018 2:44 pm
With the exception of the last four weeks, all the BND returns for the past year are negative. Down about 2% YTD, down 2% for the last 6 months, and down a little more than 1% for the past 12 months.
Total Bond Market (total return) is also down for the past two years.
Image
Last edited by MnD on Wed Jun 13, 2018 2:56 pm, edited 1 time in total.

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Sandtrap
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Re: Bottom hit for bond market?

Post by Sandtrap » Wed Jun 13, 2018 2:55 pm

Solutions?
Reinvest in CD's, Treasuries, etc.??
What to do.. . . .what to do. . .

j

Blueskies123
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Location: South Florida

Re: Bottom hit for bond market?

Post by Blueskies123 » Wed Jun 13, 2018 2:55 pm

I have already moved about 70% of my bond ETFs and mutual funds to 1 and 2 year Treasuries and CDs.

MnD
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Re: Bottom hit for bond market?

Post by MnD » Wed Jun 13, 2018 3:49 pm

Sandtrap wrote:
Wed Jun 13, 2018 2:55 pm
Solutions?
Reinvest in CD's, Treasuries, etc.??
What to do.. . . .what to do. . .
Get the easiest, low stress part-time federal job you can find and roll everything into the TSP G fund.
Admission gate attendant at some obscure National Monument that's only open on Tuesdays and Saturday.

Engineer250
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Re: Bottom hit for bond market?

Post by Engineer250 » Wed Jun 13, 2018 7:29 pm

MnD wrote:
Wed Jun 13, 2018 3:49 pm
Sandtrap wrote:
Wed Jun 13, 2018 2:55 pm
Solutions?
Reinvest in CD's, Treasuries, etc.??
What to do.. . . .what to do. . .
Get the easiest, low stress part-time federal job you can find and roll everything into the TSP G fund.
Admission gate attendant at some obscure National Monument that's only open on Tuesdays and Saturday.
Why not work there full time, stay five years, and get a pension. Or work your last five years and get healthcare.
Where the tides of fortune take us, no man can know.

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