|
PureBytes Links
Trading Reference Links
|
Well, I'm no expert but I do understand the basics and I wouldn't be in
bonds right now, no way.
Let's say you have a bond that pays 5.5% and interest rates have risen to
6.5%. Any Joe can now get a bond that pays 6.5%. Let's say you want to
sell your bond -- you'll have to sell it at a discount to get rid of it.
That's the problem with bonds in an rising interest rate environment --
bond mutual fund losses in history show this most clearly.
"But rates are falling" I hear you saying. True. But historically
speaking, where on the great interest rate oscillator are we right now??
Hmmm...
----------
From: Bill Saxon[SMTP:bsaxon@xxxxxxxxxxxxxxx]
Reply To: metastock@xxxxxxxxxxxxx
Sent: Wednesday, October 14, 1998 9:43 AM
To: metastock@xxxxxxxxxxxxx
Subject: Re: These funds are no fun
Fred Bender wrote:
> Bill Saxon wrote:
>
> > I felt I could simplify my life by transferring all my sector money
> > from Fidelity to Rydex.
>
> That you find no sector funds you would want to own only confirms that we
> are in a bear market. <snip> Best stay in cash or bonds, until this
> thing runs its course, I'd say.
>
> Best,
> Fred
I agree for the long term on the bonds I have not altered my allocation to
them for my long term money. Although I did move some to Montgomery Short
Duration Bond Fund for now.
Short term my guesstimate for long term treasuries is something else.
Bonds
became so overbought that they defied the old saw, "Trees don't grow to the
sky". They have been pruned a lot but I think the tree surgeon is still at
work. Interest rates are arguably one of the toughest calls to make, but I
am short term bearish and put some bucks in Juno last week. If I had any
balls and were they brass I would short Zeros. I may be a little late,
but
I don't think so. A major trendline from the middle of August has been
broken. There would appear to be support about 120 to 125 on the long bond
but that is a ways down.
The ins and outs of the fundamentals are just too much for me to
understand.
I do better with stocks and mutual funds than with bonds and would
appreciate
any opinions.
|