Anyone able to throw out some bond education where to buy them. What’s a good bond what’s a junk bond etc. I have been seeing a lot of stuff saying the bond market is crashing and it’s a good time to get in now that interest rates are high. Anyone here well versed in these?
Bonds
- Thread starter Durk
- Start date
Bond is the most complex instrument
It is larger , more complex , and more important then the equities market
I can dive into it but it all depends at what level of macro economics knowledge you have
There is a lot of good info online that covers the basics
There is government bond , corporate bonds
All these bonds have different credit ratings
Making them investment grade to junk bonds
All of these bonds have a price and yield when they are issued
primary dealers are the ones who have to buy usa government when they are auctioned
There are bonds that are various duration from 1m 3m ( t bills ).. to 30y
Then they are sold on the secondary market to us ( clients ) after the PD have them
As rates go up price of bond goes doen
As rates go down price of bonds go up
Now to sum up SVB
Using the info above
“If you had never heard of Silicon Valley Bank before this week, you likely have by now. SVB was home to cash belonging to half of all venture-backed startups in the US. So it came as a bit of a surprise when the bank suffered an $1.8 billion loss on securities sales and made plans to raise money by selling shares. Surprise turned into panic, which turned into a run on the bank. On Friday, SVB became the biggest US bank to fail in more than a decade. But that’s not all. SVB’s implosion came shortly after crypto lender Silvergate Capital said it planned to shut down. For both, part of the problem was an unusually fickle depositor base. But perhaps the bigger issue—and the threat to the broader financial sector—was rising interest rates. Those rates have left banks laden with low-interest bonds that can’t be sold in a hurry without incurring big losses. If too many customers want their cash, and a bank needs to sell bonds to pay up, it risks a vicious cycle like the one that befell SVB. California state regulators took possession of the lender, and some observers say the meltdown shouldn’t pose a risk of contagion as long as depositors are made whole. But Robert Burgess writes in Bloomberg Opinion that the debacle should nevertheless scare us all.”
Any ones in particular I should look at? I was thinking of going to my bank and setting something up.
Exactly what my investment guy is saying. But I am still scared so I have been putting extra money into a interest bearing account at 4.55%
I got a shit load in the market still, but its for long term, so I'm not worried about it. Its all bounced back and made a bit of money.
Those look nice. I am well versed in stocks, but not bonds lol, so if I buy one with let’s say a 2 year maturation date will my return go up even more if rates are dropped before it matures?
I wish i knew 1/8 of what you do on these subjects. Great knowledge...
I remember my mom bought a bond when I was a baby, was $50. 20 years later was worth $100. That when it matured.
You get what you lock into, but there under 5%. I would pass on them, until the rate goes up more.
lots of short term GICs with decent rates - 30. 60, 90, days. Very safe while we wait to see what the market does. Basically treat the short term GIC as a bank account to store your cash. If you think you're going to time the market and "buy low" - you're fooling yourself. The smartest people in the world move their cash out of the market during high volatility like we're seeing. Don't be cute... The goal right now should be to protect your funds and don't let them rot in a 0% interest bank account.
I agree with dont try to time the market. But I dont believe the big whales move their money out of the market into bonds or gics. They collect the dividends and buy up cheap shares.
And short and buy puts and sell calls and use insider trading to thier advantage. They hold shares longer because they have the money to hedge against them in tough times and when they see tide changing they scoop ul some more lol