No. of Recommendations: 0
I have a really basic question...
I thought I understood bonds until I compared the 10 year treasury and the fidelity total bond market fund (FTBFX).
I expected that when interest rates fell, the bond fund would go up. When interest rates were somewhat stable,they should be stable.
But, there are excursions in the bond fund that don't relate. For example,

in Sept 9 - Nov 19 Interest rate on the 10 year treasury was mostly the same (about 3.6% ) but the total bond fund dropped 10 %.
Then when interest rated dropped 30% from Nov 19 2008 to Dec 18 2008, interest rates dropped and the total bond fund was mostly unmoved.
What gives?? Any help would be appreciated.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.