My first venture into the European bond market has not gone well. I am down about 20% in 2 months, in what was supposed to be allocation to a quality bond holding. I would understand if it was a leveraged product, but its not (IBGL; its a long bond ETF).
I know its wrong to try and time the market, but this has put me off bonds for a long time.
European bond collapse
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European Son
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MachineGhost
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Re: European bond collapse
It sucks, but remember that the principal is guaranteed as long as you hold to maturity. So don't panic and sell.
I do question if the PP will work without using the world's reserve currency for the cash and T-Bonds. Flight to safety is a critical component of the PP working. The USA is Rome for better or for worse.
I do question if the PP will work without using the world's reserve currency for the cash and T-Bonds. Flight to safety is a critical component of the PP working. The USA is Rome for better or for worse.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: European bond collapse
Based upon current interest rates, it would appear to me that the German bund has been more of a flight to safety than U.S. treasuries.MachineGhost wrote: It sucks, but remember that the principal is guaranteed as long as you hold to maturity. So don't panic and sell.
I do question if the PP will work without using the world's reserve currency for the cash and T-Bonds. Flight to safety is a critical component of the PP working. The USA is Rome for better or for worse.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: European bond collapse
You bought exactly when bonds hit their maximum. In the long run it shouldn't matter as you should have other asset classes and should rebalance at least once a year. So next time you buy bonds, they won't be so highly valued.European Son wrote: My first venture into the European bond market has not gone well. I am down about 20% in 2 months, in what was supposed to be allocation to a quality bond holding. I would understand if it was a leveraged product, but its not (IBGL; its a long bond ETF).
I know its wrong to try and time the market, but this has put me off bonds for a long time.
I am here to learn. If I say something stupid, please correct me 
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European Son
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Re: European bond collapse
That is my strategy, buy more at the lower price. As they say...... I got a fever, and the only solution is more cowbell.
My point is, as a European proxy for TLT in the PP, the AAA / AA ratter, northern Europe only, Govt bond ETF is very volatile.
Imagine if you bought TLT 2 months back, and it fell 20%. There would be riots in the street.
My point is, as a European proxy for TLT in the PP, the AAA / AA ratter, northern Europe only, Govt bond ETF is very volatile.
Imagine if you bought TLT 2 months back, and it fell 20%. There would be riots in the street.
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MachineGhost
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Re: European bond collapse
It has fallen almost that much in 6 months.European Son wrote: Imagine if you bought TLT 2 months back, and it fell 20%. There would be riots in the street.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!