Bond broker, page-7

  1. 3,582 Posts.
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    actually not true.
    during the GFC and years afterwards bonds did very well,
    double digit returns in fact,

    because when people flee the stockmarket they rush to the safety of US treasury bonds
    and other AAA rated bonds with extremely low default risk ( not emerging markets and other
    junk bonds ).
    the issue now however is the likelihood of rising interest rates which will be very negative
    for standard bonds, but not for floating rate bonds : these benefit from rising interest rates.
    My only bond exposure therefore is in floating rate bonds, although only about 10% of my overall
    portfolio as I think for now stocks are still the place to be.
    Interest rates don't rise when economies are doing badly. Therefore if another GFC occurs
    in future, interest rates would have to fall again which would be positive for bonds.
    If you want to be in bonds at the moment, I would strongly recommend floating rate notes.
    there are managed bond funds that use these eg Perpetual diversified income, Smarter money
    higher income, Bentham global income, Spectrum strategic income, Alexander credit opportunities,
    Realm high income, and others.
    Stay away from government bonds as these will fall as interest rates rise.
 
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