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Post by catdog on Mar 15, 2024 19:51:24 GMT
I bought FBND in October. The 10yr was hovering up near 5%. The 10yr came down quickly to below 4% in roughly two months. FBND quickly returned about 10% in the same two month period. I don't know too much about charts or investing in bonds, but I was wondering if there was a correlation between the 10YR fall and FBND's rise? I was considering adding to FBND if the 10YR goes a little higher. All abuse is welcomed Catdog
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10yr
Mar 15, 2024 20:00:05 GMT
Post by yogibearbull on Mar 15, 2024 20:00:05 GMT
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10yr
Mar 15, 2024 20:06:38 GMT
Post by richardsok on Mar 15, 2024 20:06:38 GMT
I bought FBND in October. The 10yr was hovering up near 5%. The 10yr came down quickly to below 4% in roughly two months. FBND quickly returned about 10% in the same two month period. I don't know too much about charts or investing in bonds, but I was wondering if there was a correlation between the 10YR fall and FBND's rise? I was considering adding to FBND if the 10YR goes a little higher. All abuse is welcomed Catdog I'm not picking up any current momentum for FBND at all. Rally attempts have been unsustained. I keep AGGH on my watch list; generally bearish now. Variable rate/sr. loan funds have been more successful lately -- but by now that may be old news.
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10yr
Mar 15, 2024 20:10:26 GMT
Post by catdog on Mar 15, 2024 20:10:26 GMT
Thanks Yogi. I have a little trouble following those charts, but I get the idea.
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10yr
Mar 15, 2024 20:15:45 GMT
Post by catdog on Mar 15, 2024 20:15:45 GMT
Thanks Richardsok. I initially made a one half position buy, so I was looking for a possible cheat/timing place to add.
catdog
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10yr
Mar 26, 2024 22:30:55 GMT
Post by Mustang on Mar 26, 2024 22:30:55 GMT
I bought FBND in October. The 10yr was hovering up near 5%. The 10yr came down quickly to below 4% in roughly two months. FBND quickly returned about 10% in the same two month period. I don't know too much about charts or investing in bonds, but I was wondering if there was a correlation between the 10YR fall and FBND's rise? I was considering adding to FBND if the 10YR goes a little higher. All abuse is welcomed Catdog Yes. Bonds are normally sold with an interest rate higher than the Fed rate depending upon risk. A bond has a face value paid at maturity and a coupon rate (interest rate) typically paid every six months. Calculating the current value of a bond is a little complicated because the market interest rate changes the current value of the bond to reflect the difference in current value to face value at maturity. The longer the time to maturity the larger the swing in current value. And, current value based on how the new interest rate affects the semi-annual payments. As was mentioned before there is an inverse relationship with interest rates. If interest rate go down the market value of the bond goes up increasing returns. www.investopedia.com/terms/b/bond-valuation.asp
The above calculations assumes no changes in risk. If the issuer of the bond or the bond itself becomes more risky then investors will demand higher interest rates. This has the same affect as the Fed raising rates. Since long term bonds are riskier than short term bond they usually require higher interest rates. That said market value depends upon investor expectations. And, although unusual, short term bonds will have higher interest rates than long term bonds if investors expect things like recession coming. www.investopedia.com/terms/i/invertedyieldcurve.asp
I hold balanced funds. As a buy and hold investor I'm counting on rates dropping a little to make up for the low returns when rates were rising. Basically, I'm expecting a recession with the Fed lowering rates to stimulate the economy. Since I cannot see the future who knows when that will happen. Some say it might happen this fall.
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10yr
Mar 27, 2024 17:15:04 GMT
Post by catdog on Mar 27, 2024 17:15:04 GMT
mustang, thanks for taking the time to explain things so a novice can understand.
catdog
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