UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next
Author: xcskier One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35387  
Subject: Re: bond-fund returns Date: 1/17/2005 2:25 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
pauleckler: thanks again. This will be my last reply to this post, I'm going to make a new post (Jan. 17) about TIPS if you care to respond to that one, also.

>I presume the major factor is that bonds paying
> a good yield mature and must be replaced by new
>ones that pay a market yield.

Yes, but supposedly the fund manager has had that problem constantly for 2-3 years. I.e., that wouldn't explain the precipitous drop in monthly dividends starting in April 2004.

Anyway, I found another Morningstar article that uses slightly different terminology: "...market YIELDS moved higher in March-April...the bond market slumped...but then recovered by late summer. So what's holding prices up now and yields down? EXPECTATIONS..." The market feared in March greater FOMC raises than actually occurred, but when the actual raises were only .25%, buyers leapt back in even though FOMC raises occurred regularly for 5 months!

So here's what I've learned: (1) the disconnect between FOMC actions and market behavior, and (2) bonds seem cut-and-dried, but ain't.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Apple

Wal-Mart Nixes Apple Pay
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement