Quote:
Originally Posted by BroadwayJoe
not that I know much....
I did buy a bond eft back in 6/21
It absloutely sucked ...I thought with the Fed hikes that I would start reaping some rewards...
Well...its not .....
2 things I would never buy again ....
bonds and emerging markets
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You've got to let the higher interest rate bonds find their way into the market. Right now the funds are packed with lower % rate bonds to collect on (that is why the share prices of the funds are tanking)
BUT
Eventually these funds will turn over their holdings to include the higher % rate bonds that will come to market over the next few years.
THEN
Eventually the Fed will stop raising rates. At that point all new bonds will be less desirable than pre-existing ones. Only at this point will the fund price recover.
This process could (and probably will) take years to fully run it's course. But buying now ensures that on YOUR investment you will always have an awesome yield. BHK for example is an investment grade corporate bond fund, If you bought shares one year ago your shares would yield 5.27%. Buying the same shares at today's prices yields 8.95%. So you get oaid 8.95% to do exactly nothing. And if you're willing to hold the shares long enough there is a potential to see your $10 shares turn into $17 shares.
