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Author: joelxwil Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76422  
Subject: Re: Bonds. Lotsa Bonds. Date: 9/15/2013 12:28 PM
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Generally speaking, the time to buy bonds, at least if you are talking about something longer term than 90 day Treasuries, is when interest rates are high, and likely to have peaked. Then you get the high interest rate, and when interest rates are lowered you get some capital appreciation.

Of course, the downside of that is that when interest rates are lowered the stock market generally rallies, and you can make more money in stocks.

Many years ago, I had an account at a bank where there was a financial adviser sitting in the lobby advertising his expertise. The market had tanked a few months earlier, and interest rates were being raised. The financial adviser told me that when the stock market began to go down he told his clients to go to bonds. Of course, that was a mistake because interest rates kept going up and they lost the money as the bonds went down to compensate for the higher interest rates. It was really pathetic, since it had been clear that interest rates were going to continue to go up.

"Pathetic", said Eeyore. "No better from this side either."
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