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User Info If The Bond Bull Market Is Over.... in forum [Market-Ticker]
Mr_clueless
Posts: 27
Incept: 2009-06-04

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Thanks @Analog and @Little_eddie.

It helps to know I'm not the only one that missed out.

And I agree, I slept well and continue to do so. I live well within my means, but given that my income has gone up ~5% total over the last 6 years, I know I'm losing to inflation.

I suspect this is true for many people, but if they had stock investments, they have probably seen their savings grow very fast masking the fact that they are probably putting away less dollars each year than the prior years.

I have been seeing < 0.1 annual returns on my 401k and savings. Next year, my returns will probably be close of double of last year. :)
Franco
Posts: 61
Incept: 2009-10-06

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My in-laws put money in a trust for my kid (high school senior) to pay for college. Yesterday I received a statement from the bank, and it shows that its 50/50 betweeen equity funds and bond funds. Being that my kid is less than a year away from starting to spend that money, and with the insane bull run in stocks, I think I would want to convert the equity funds to cash. But if interest rates start a secular trend up, then I should probably also sell the bond funds, no? Ugh, I hate this mutual fund stuff.
Tickerguy
Posts: 151187
Incept: 2007-06-26
A True American Patriot!
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You need to know what the bond fund holds.

Duration is death in a rising rate environment as the change in current price is approximately the change in coupon times remaining duration.

A college fund is expected to be liquidated at the point of consumption; it is NOT an asset expected to return money for a long period of time (as a retirement fund usually is.) There's a very clean argument for such a fund to be 100% liquid and safe a year prior to expected use; a drawdown at that point is likely to be unrecoverable and potentially fatal to its expected purpose.

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Winding it down.
Franco
Posts: 61
Incept: 2009-10-06

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Most of the money in the bond fund is in FIJEX.
Tickerguy
Posts: 151187
Incept: 2007-06-26
A True American Patriot!
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That's a fund with a relatively short history, but duration looks low and it looks like all US Ts, so credit risk is nil. In short while it's not cash it looks like "reasonably close to cash."

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Winding it down.
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