Why are bond prices and bond fund navs doing this?

[mikes425]

Most of the damage already done IMO ... you guys really foresee treasuries like SCHO, TIPS or Ultra Short/ ST bond funds as going down substantially for years to come —from here? So there is nothing in them that you see as having any insurance or lower risk value in the volatility of, say, a 30+% equity crash?

[COcheesehead]

Quote:

Originally Posted by mikes425 Most of the damage already done IMO ... you guys really foresee treasuries like SCHO, TIPS or Ultra Short/ ST bond funds as going down substantially for years to come —from here? So there is nothing in them that you see as having any insurance or lower risk value in the volatility of, say, a 30+% equity crash?

Your thoughts are likely true in the short term. Maybe one or two more rate increases, then a pause. Those increases will give bonds another haircut, but then the market will realize the Fed is likely done because a recession is imminent.
Longer term I think rates rise slowly.
I continue to endorse a ladder vs a fund to ward off NAV erosion and have an interest rate hedge.

[Freedom56]

The bond market has already discounted the fed funds going to 3.8-4% next year. The yield curve is beginning to normalize but at higher levels. That being said, bond funds have big issues going forward. Their yields are lower than treasuries and CDs.

[Katsmeow]

Quote:

Originally Posted by Graybeard If it's in an IRA or Roth there's no tax consequences to exchanging out of the bond fund. I had a short and an ultra short term bond fund cuz I was concerned about duration and still lost a lot so I dumped them both, accepted the loss and will put the money into T bills. Maybe CDs one day. I'm done with bond funds unless we find ourselves in a decreasing rate environment, then your nav increases.

I sold my Vanguard Total Bond Fund and my Fidelity US Bond Fund holdings (all in an IRA). I do still own some Wellesley. About 31% of my fixed income was in Wellesley and still in. I think I will likely buy Treasury bills but am pondering that a bit.

Quote:

Originally Posted by mikes425 Most of the damage already done IMO ... you guys really foresee treasuries like SCHO, TIPS or Ultra Short/ ST bond funds as going down substantially for years to come —from here? So there is nothing in them that you see as having any insurance or lower risk value in the volatility of, say, a 30+% equity crash?

Well, I don't know about years to come. What I do feel is that right now I see no benefit to having any of my fixed income in the two bond funds I mentioned. I may end up right now just buying Treasury bills. Maybe I will buy a ST bond fund in the not too distant future. We'll see. I mean I'm not going to just keep my proceeds in the money market. Of course, I do still have the Wellesley which I plan to keep.