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You know the bond bubble doesn't have to burst, it can just leak. Treasuries seemed to have topped months ago. Munis also appear to have topped and the fave in this sector, emerging markets bonds have begun the New Year in stall mode. Only junk and non agency RMBS seem to be still sailing along. Reading this forum it appears that many here have already lightened up on Treasuries.
Hi Hiyield007, I noted previously that some shifting started around July 25 2012, after Mario Draghi's blip..."We'll do whatever it takes." This involved U.S. dollar value as well. I noted Saturday that em bonds and most em bond funds are down about 2% since the first week of December, 2012. Today, Jan. 14 is the first somewhat strong day for em bonds at about a + .25% at 2pm. Also from the first week of December is that many of the broad based (not multi-sector) investment grade bond funds have moved down between .75% and 3.75%. This area in general is the gov't. issue Treasury, high quality corp, TIPs, etc. --- SUBFX is down 3% in the past 4 weeks; as well as PTTRX. PONDX and its cousins continue to ride the waves. HY from this same period is holding. So, I can only note sideways weakness in some of the bond areas; but it is not a run at this time; and as you noted....a slow leak. For our house and some bond funds, is that with yields running about 1.5%, and perhaps softness in buying, even though losses are not much; we won't be able to hang around in the IG bond area. 'Course, who knows what the crazy world of forth coming debt ceiling shout down will bring. Take care, Catch
Until the Fed stops buying $85 Billion worth of 10 year treasuries and mortgages back securities interest rates on these securities will have downward pressure. This, along with the fact that the world still views these securities as a "flight to safety" makes them an interesting investment in my mind. On the other side of the argument are the eventual interest rate pendulum (raising rates), the potential for a down grade in US soviegn debt issues and the economic recovery (lower unemployment).
For Treasury investments I use two zero coupon bond mutual funds managed by American Century that mature in 2025 and 2020. Also EDV (Vaguard's Long Duration Treasuries) gives a similar Treasury dynamic in a EFT investment with an even longer maturity. They seem like good yang investments to the overall equity market when it yings upward.
Charted below is VTI (Total US Market) along with BTTRX. Allocating to both a broad market equity fund (like VTI) and a Zero Coupon Bond Fund (like BTTRX) in different percentages (90%/10%, 80%/20%, 70%/30%, etc.) could be one way to manage through the ups and downs of the market. Take profits...reallocate....take profits...reallocate. I like to use 5% trigger for a fund like BTTRX and 10% for a ETF like VTI.
Comments
I noted previously that some shifting started around July 25 2012, after Mario Draghi's blip..."We'll do whatever it takes." This involved U.S. dollar value as well.
I noted Saturday that em bonds and most em bond funds are down about 2% since the first week of December, 2012. Today, Jan. 14 is the first somewhat strong day for em bonds at about a + .25% at 2pm. Also from the first week of December is that many of the broad based (not multi-sector) investment grade bond funds have moved down between .75% and 3.75%. This area in general is the gov't. issue Treasury, high quality corp, TIPs, etc.
--- SUBFX is down 3% in the past 4 weeks; as well as PTTRX. PONDX and its cousins continue to ride the waves.
HY from this same period is holding.
So, I can only note sideways weakness in some of the bond areas; but it is not a run at this time; and as you noted....a slow leak.
For our house and some bond funds, is that with yields running about 1.5%, and perhaps softness in buying, even though losses are not much; we won't be able to hang around in the IG bond area.
'Course, who knows what the crazy world of forth coming debt ceiling shout down will bring.
Take care,
Catch
For Treasury investments I use two zero coupon bond mutual funds managed by American Century that mature in 2025 and 2020. Also EDV (Vaguard's Long Duration Treasuries) gives a similar Treasury dynamic in a EFT investment with an even longer maturity. They seem like good yang investments to the overall equity market when it yings upward.
Charted below is VTI (Total US Market) along with BTTRX. Allocating to both a broad market equity fund (like VTI) and a Zero Coupon Bond Fund (like BTTRX) in different percentages (90%/10%, 80%/20%, 70%/30%, etc.) could be one way to manage through the ups and downs of the market. Take profits...reallocate....take profits...reallocate. I like to use 5% trigger for a fund like BTTRX and 10% for a ETF like VTI.