Bonds -- April 27, 2024

Locator: 46876BONDS.

The other day a reader posted a note on bonds in response to a blog. Coincidentally, that very day, The Wall Street Journal published this story:

Anyway, I've never bought bonds -- except back in elementary school back in the late 50s and early 60s and some iBonds in the 80s -- all of which have been sold -- I don't understand them.

I used to enjoy Jason Zweig but I don't read many of his columns any more. Right now, like Cramer (apparently), he's recommending Treasury bills. 

Jason ends his article with "T-bills are hard to beat."

Flashback: this was Jason's column last week to which he refers this week:

The lede:

Only a few things in investing life are certain.

One is that investors will always find a way to lose ungodly amounts of money on bond funds.

In 2023, investors poured a record $54 billion into mutual funds and exchange-traded funds specializing in long-term U.S. government debt. More than half of the iShares 20+ Year Treasury Bond ETF’s $46.1 billion in total assets, for instance, came in during last year alone.

Right on cue, funds of Treasury bonds maturing in 20 years or beyond have lost about 9% so far this year, handing billions of dollars in losses to their latest buyers.

Investors similarly shot themselves in the foot by loading up on bond funds in 1993 and 2014, right before the market tanked.

You can avoid their fate, though, by following a few basic guidelines. It’s impossible to say for sure why so many people barged into long-term bond funds last year. Some, says Steve Laipply, global co-head of fixed-income ETFs at BlackRock, may just have been thinking, “Finally, I can get a yield in bonds that I haven’t been able to get in years and years.”

One simple basic guideline to follow if one does not want to lose money in bonds: don't buy bonds. 

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Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.

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Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.