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Larry Swedroe on timing bond investments
Old 09-28-2012, 09:17 AM   #1
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Larry Swedroe on timing bond investments

His point is that bond prices reflect the expectation of changes in future interest rates and a premium for the risk that the rates may rise more than expected. He uses past results to show that sticking to a well diversified AA gives you almost the same returns as moving in/out of bonds/cash with perfect hindsight.

How to invest with interest rates so low - CBS News

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Old 09-28-2012, 09:20 AM   #2
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That may well be true for investment grade and treasuries, but that is not the case with junky stuff. The market regularly (3 to 5 years) gets wildly optimistic for a period of time and then crashes.

I also have to wonder how valid the analysis is with so much monkeying going on with MBS and treasury rates.
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