Global Bond Bear

[yogibearbull]

The drawdown for the global bond index was recently at -20.4% for the first time in its history (1990- ). Based on the interest rate history over 5,000 years, this may be the first time ever for the global bond market. The US bond index (1976- ) had a record drawdown of -14.3% in mid-June, recent (only) -12.7%. Twitter LINK

None of this would make you feel better. But if you hold bonds in any form, including within allocation/balanced funds, you know that it has been painful. Of course, some category of bonds (HYs, EMs) and some types of bond funds (CEFs) have had even worse drawdowns.

Twitter Chart1, Global Bond Index pbs.twimg.com/media/FbpXRzBWAAE4PEb?format=png&name=medium

Twitter Chart2, US Bond Index pbs.twimg.com/media/FbpX43rWIAEYBSa?format=png&name=medium

Twitter Chart3, 5,000 Yr Rate History pbs.twimg.com/media/FbpYQ5dWYAUjXh9?format=jpg&name=medium

[mozart522]

Thanks, Yogi. Only T-bills for me right now

[FD1000]

Good observation.  The key, as always, what to do now? Or When to get in?

[yogibearbull]

I have exposure through bond CEFs (muni, taxable).

Others have to decide on their risk tolerance and may stick with OEFs (core, core-plus, multisector).

IMO, the bond market has anticipated the next few Fed rate hikes. So, one can start to scale in. If have existing positions with losses, do tax-swaps into similar funds.

[ECE Prof]

Bond sell-off offers opportunities for income investors.

www.barrons.com/articles/bond-market-selloff-opportunities-income-investors-51662076392?mod=hp_LEAD_2

That has changed. Attractive yields are cropping up across the bond landscape and parts of the stock market. “There’s a lot more income today than there was at the start of the year,” says Kelsey Berro, a portfolio manager at J.P. Morgan Asset Management.