We have seen how the interest rates increase has been affecting people with mortgages but in the equity/bond market, it also reflect a similar picture.
When interest rates go up, the bond prices fall. And you can see from chart, it has fallen close to 50% from the peak of 180 to 92 before it recovers recently to 106.
Now, if you believe my predictions that FED will start to reduce the interest rates next year, then we can see the bond prices returning back to its glorious days.
So, you can park a certain % of your portfolio funds to this Bond ETF if you like but imo, a large part of your investment capital should still be in equities. The percentage can differs as people believe in portfolio restructuring by different fund houses, etc.
When interest rates go up, the bond prices fall. And you can see from chart, it has fallen close to 50% from the peak of 180 to 92 before it recovers recently to 106.
Now, if you believe my predictions that FED will start to reduce the interest rates next year, then we can see the bond prices returning back to its glorious days.
So, you can park a certain % of your portfolio funds to this Bond ETF if you like but imo, a large part of your investment capital should still be in equities. The percentage can differs as people believe in portfolio restructuring by different fund houses, etc.
Comment:
those who have missed catching it , please be patient. It has been rallying up since Oct and a pullback is necessary before it goes further. I am looking at 95 to buy more
Comment:
looking forward to a retracement at 94 price level
Comment:
now that Fed is not going to cut rates in March, we will have to wait for June to see if they do so....