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It's not that I'm completely ignorant. I realize bonds go up and down based on inflation and perceived threats. What I don't really get is why bond ETFs and bond funds which hold only the most conservative north American government bonds will go up and down from day to day when those factors haven't changed.
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The price of any investment vehicle varies partly on the basis of its own fundamentals, and partially on the basis of how it compares to other investments. Even if the fundamentals for an investment remain unchanged, the price can go up because other investments are looking worse and money is shifting to it as a better choice. Likewise if everything else looks better it will not matter than the fundamentals are unchanged, money will move out and the price go down.
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I realize bonds go up and down based on inflation and perceived threats. What I don't really get is why bond ETFs and bond funds which hold only the most conservative north American government bonds will go up and down from day to day when those factors haven't changed.

The bolded sentence is wrong. That's why you aren't getting it.

As Ken Fisher continually says (as well as others), stock & bond prices are set by supply and demand. Period.

The things you mentioned are (some of the) factors that buyers & sellers take into account when they decide to sell (supply) or buy (demand).

(BTW, this is also why WMT price hasn't changed much in the last 10 years, despite the booming increase in valuations. Valuations don't make the price go up, only supply and demand make the price go up.)
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Thanks guys. I think I kind of intuitively knew that, given that on up days bonds are generally down and on down days they're generally up. Today, for example, my rr bond etf is way down. So then if the market starts feeling better I'm not going to be seeing the kinds of returns my bond funds and ETFs have shown so far this year - ie, up between 6%-12%.
If Europe solves its mess than money will flow out of the bond ETFs and funds and into equities and the bond ETFs and funds will plunge... ?
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"""If Europe solves its mess than money will flow out of the bond ETFs and funds and into equities and the bond ETFs and funds will plunge... ?"""

Whichever way bond prices go, it will probably be based on a whole lot more factors than above.

I bot some May 2040 US treas stripped bonds just a little over a year ago for 250 each. I just sold them today for 410 each. The yield today around 3% I think, but I just glanced at it. In other words, there is a lot more room on the downside for your bond funds than there is on the upside. But, that's just my opinion.

If you looking for individual bonds, I still hold/like MeadWestVaCo. The ones I hold now are due 2032, I think, coupon is 6.8%, and selling below par for a yield around 7%. I happen to think they are an excellent risk/reward ratio...much better risk/reward ratio than I could get with those stripped treasuries.
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Maybe somebody who has a lot of a given bond has to pay for his daughter's wedding. So he puts the bonds on the market. There is suddenly more supply, so the price goes down. Obviously, the fundamentals haven't changed.
It is all supply and demand. Of course, when there is bad news about a company, people are less likely to want to buy its stock or bonds, but as you have seen, price swings happen all the time in the absence of any such news.

Best wishes, Chr
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