Blacktree,You've identified just one source of demand, and maybe not even the most important one. Of the daily/weekly/monthly/yearly demand for bonds, what percentage is driven by retail investors and what percentage by institutional investors? For sure, a lot of that institutional buying is done on behalf of retail investors, through bond funds. Also, retail participation is greater in some asset classes than others. But my guess would be that the key factor in bond prices is fear. When investors are scared, whether they are little or big, they become less price sensitive (conversely, more inclined to drive prices up). My guess, also, that the question behind your question is whether you should grab some windfall gains now, or wait a bit to see if they get bigger, buoyed up by January's buying. The techie answer would be to use T&S to plot moving averages and trendlines. If prices are still moving in a favorable direction, then set yourself a trailing stop. (Otherwise, get out now.) When the stop gets tagged, sell. In other words, apply the same techniques to bond prices that the mo-mo boys use for stock prices: Relative Strength, MACD, and such. That way, the decision is evidence-based, emotions-free, and avoids the prediction problem. "X happened, so I did Y." Use FINRA for T&S data and Excel for the charting. Best wishes in setting in up.
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