Quote:
Originally Posted by Sooner or later
You are correct, you will pay more for a higher rate bond.
A $1000, 6% bond in a 4% environment will cost far more than a grand . The bond fund will go up in a declining rate environment.
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Mutual Bonds Funds are terrible....If interest rates go up after you buy in you LOSE PRINCIPLE, but get a little better income stream. If interest rate go down you GAIN principle but lose income stream. The day you cash out you are either a winner or loser.
Better to create your own Bond portfolio.... Bonds are redeemed at face value upon maturity while you collect your set income stream.
Bonds have had a BULL run with continued price appreciation since the early 90's. Bond prices have gone up while interest rates (income stream has declined) went down. The US has funded it's debt on CHEAP INTEREST RATES...which robs the guy who saved and is sitting on a lot of cash...try making it on 2.5% to a now 3% interest rate...pffft...
You are fked...better to have gone out and blown the money on hookers and blow.
The ONLY fking alternative to make any money has been the EQUITY market with it's associated RISK. The FED has fixed it so that Equities would do well SO THAT THE PENSION FUNDS (institutional investors) COULD MAKE THEIR 8% keep it solvent ROI. WHY DO YA THINK EQUITES HAVE DONE SO WELLLLLL. Only game in town is the answer.
It is a good thing that you Boyz are coming to some understanding of just how fked you ALLL are...But you are REAL LATE TO THE PARTY...
I am continually amazed about HOW CLUELESS EVERY LAST ONE OF YOU ARE...You should stick to your day jobs...there you have proficiency...
I do not mean to be mean, but it is so frustrating wading through all the misconceptions and BS that you Boyz believe in. I just have to shake my head because it is so sad that it make me want to throw up my hands and cry.
I know what is going on because this is my day job, my money has been ON THE LINE FOR 30 years. So it is no abstract pie in the sky BS that I am talking about. It is for REALS....
As a matter of fact I know more than most of the Anointed Masters of the Universe on Wall Street or Academia or DC...
It really is interesting when you get quoted on CNBC five minutes after you send them an Email. Or a FED President starts stuttering ashen faced (even Mother in Tucson saw that). When five minutes before sending he was joking around with the crew.
There is just a lot of things you Boyz do not see, and if you can't see it it doesn't exist for you...it is called being CLUELESS. Base you decisions on being Clueless and you wind up LOSING.
America can REDEEM ITSELF, but it is going to have to pay the PRICE. So far...America is still on a drunken binge....and it is going to get a lot worse before you BOYZ start to sober up...
in 1980 I started saying that the US government would continue on with business as usual until it could not beg, borrow, print, steal nor tax another dime. When the business as usual regime comes to a screeching halt is the day that you will wake up...until then carry on kicking the can down the road. It is the simple math of human nature...civilizations come civilizations go...