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Bonds/the up or down movement of bond value to me in high interest enviorment
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Question
I have a fed tax free bond fund that Im enrolled in.I fully expect prime interest rates in 5 yrs to be in mid to upper teens;will this neg impact my fund?
It depends on the duration of the fund.
Long maturities would suffer badly.
Short bond funds would do much better.
In your case, money market funds would be the safest - but they return next to nothing now!
With a move like you think, your fund could lose 25 to 50%!
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| Rating(1-10) | Knowledgeability = 10 | Clarity of Response = 10 | Politeness = 10 |
| Comment | Mr. Ingram's answers gave me a better perspective of the matter I asked about. Thank you. | ||
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Doug Ingram
Expertise
Fixed income portfolio allocation and strategies for institutional investors. Having designed multi-scenario risk quantification and cash flow projection models for nearly 25 years, Strategic Technical Initiatives can answer your regulatory, SFAS 115 allocation, securities selection, and other questions dealing with yield curve placement and portfolio mix strategies. I write the Bond Market Review on behalf of Commerce Street Capital Management.
Experience
Trading and designing portfolio strategies since 1980.
Education/Credentials
Physics and Differential Mathematics
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