| Bonds are the worst investment - period |
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Day Trader
Full Member
Cash: $ 13.45
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Joined: 05 Jul 2005
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| Bonds are the worst investment - period |
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Of all investments that I own, bonds are performing worst! They are losing me money - and they should do exactly the opposite. Bonds should serve as some kind of low-risk investment protection when combined with stocks. But in reality, they are just losing money.
Stocks + Dividents = make money
Bonds, Money Market = lose money
It's simple as that!
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Thu Apr 20, 2006 2:53 am |
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Rolo
Yo' Daddy
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Location: Colorado/Florida
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| Re: Bonds are the worst investment - period |
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quote:
Originally posted by Day Trader
Of all investments that I own, bonds are performing worst!
Well DUH! You should understand what it is you are buying BEFORE buying it as well as general market climate/conditions, i.e. interest rates.
For every point interest rates increase, your bond decreases 10% in value, and vice-versa. e.g. your 6% bond will drop 10% in value when 7% bonds are available.
I also echo what Coaster said.
The only bonds I like are junk bonds and that is only when there are NO profits to be made ANYWHERE else (2002).
"Expect me when you see me."
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Thu Apr 20, 2006 3:39 am |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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| Re: Bonds are the worst investment - period |
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quote:
Originally posted by Day Trader
Stocks + Dividends = make money
Not necessarily. The stock's price fluctuates and the dividend amount can change each time (generally quarterly). VLCCF is a good example I held for a while and sold when the dividend dropped from $2/quarter to $0.75.
"Expect me when you see me."
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Thu Apr 20, 2006 3:42 am |
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BondTrader
New Member
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Joined: 30 Apr 2006
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Duh. Bonds are debt, stock is equity. One of the only purposes of bonds for the average investor is a safe haven to receive an income stream. Obviously, if you're in a rising interest rate environment, the price of your bond will fall as the two generally move inversely. This you should have known before buying your bonds. At least you can get your premium back at the end of maturity provided the issuer doesn't default.
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Sun Apr 30, 2006 11:59 pm |
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Kiaser
Senior Member
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Joined: 12 Apr 2006
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Wasn't the only investment to improve during the Great Depression bonds? Stocks plummet, bonds seem to improve. Definetely not a growth investment, but it has it'r purposes.
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Mon May 01, 2006 9:18 pm |
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BondTrader
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Joined: 30 Apr 2006
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Oh they definitely have their purposes - generally bonds are the next safe-haven after stocks (and before gold...). Especially if you are nearing retirement and need to focus on lower risk, higher fixed-income type securities. Just don't expect to make 10% on a bond - it happens but the purpose of a bond is to get paid back your cash flow, not to generate large returns like equity investing (unless of course you are a professional fixed-income money manager...) 
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Tue May 02, 2006 1:37 am |
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mbd
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Joined: 31 Mar 2006
Location: Rogers, AR
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If stocks are doing poorly, bonds are likely to do poorly as well. The two do not counteract each other. In difficult economic times, your cash will be worth more, even though it won't seem to 'perform'. The number of dollars you have won't increase but the value of the dollar will.
Bonds should be part of a balanced portfolio that includes other investment types. The package will serve you well over time.
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Sun May 07, 2006 6:24 am |
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BondTrader
New Member
Cash: $ 1.20
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Joined: 30 Apr 2006
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Just don't hold the cash in US dollars. That sucker will continue to fall.
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Sun May 07, 2006 9:43 am |
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