Bond Market

Harmless_Venom
Harmless_Venom

Does anyone have any good primers on the bond market and how to make money is it? Is there anything left in bonds, or is it all just in high yield nowadays?

All urls found in this thread:

bogleheads.org/wiki/Bond_basics#Role_in_a_portfolio
investinginbonds.com/learnmore.asp?catid=10&subcatid=47&id=184
budgeting.thenest.com/bond-etfs-qualified-dividends-24564.html

SniperWish
SniperWish

Bump for interest

FastChef
FastChef

Bonds are traded on closed and semi-closed markets, by highly-specialized traders. Unless you're working at a large trading desk and have substantial capital, you have zero chance to compete. You're going to get the worst executions possible, and the pros will eat you alive.

If your risk profile calls for a bond allocation in your portfolio, do yourself a favor and buy a bond index.

Sir_Gallonhead
Sir_Gallonhead

Any good bond indices you'd recommend looking into? I saw a thread around here shilling to short junk bonds a couple days ago.

massdebater
massdebater

I saw a thread around here shilling to short junk bonds a couple days ago.
Just stop. Stop chasing Veeky Forums meme investments, stop trying to time the market, stop with the leveraged investing. Stop doing dumb stuff.

You want a good bond index? Fine: BND. If you're feeling the itch to be a Wolf of Wall Street you can get crazy and throw in a little BNDX. Now let's be wild and hold our investment for a solid 10-30 years, enjoying the meme magic called compounding.

Sorry to make fun of you, but you're being ridiculous and noobish. Go learn what bonds are and how they fit into a well-constructed portfolio. Then come back and ask questions.

bogleheads.org/wiki/Bond_basics#Role_in_a_portfolio

Playboyize
Playboyize

Unless you're working at a large trading desk and have substantial capital, you have zero chance to compete

not true. I've bought bonds with interactive brokers without much money. it's easy.

you find a corporation you want to buy bonds from, then filter out the maturity dates you're looking for, and then buy the bond at whatever price it is offered. the high the price, the lower the yield, and vice versa.

TreeEater
TreeEater

I've bought bonds with interactive brokers without much money. it's easy.
And you vastly overpaid for that board compared to a real bond trader. In fact, you probably paid a significant percentage to some middleman who held your bond for 4 milliseconds before reselling it to you as a large profit.

Please learn about how bond markets work before posting dumb stuff. They're not at all the same as stock markets, as you seem to think. Its criminal that your broker allows you to buy stuff when you're so ignorant, but IB is only in it for the money.

SniperGod
SniperGod

uh my bond buys worked out very well, actually. interactive brokers is great for buying bonds.

BinaryMan
BinaryMan

OP was asking for a primer on bonds before asking specifically about them

GoogleCat
GoogleCat

Vanguard lets you buy bonds (or just new bonds?) for free. I wouldn't buy bonds unless it's American treasuries. You have significant risk when buying corporate bonds since you're not diversified. Buying individual bonds is a great way to save money if you intend to hold until maturity since you will always get back your principal.

Nojokur
Nojokur

You want a good bond index? Fine: BND. If you're feeling the itch to be a Wolf of Wall Street you can get crazy and throw in a little BNDX. Now let's be wild and hold our investment for a solid 10-30 years, enjoying the meme magic called compounding.
BND is a terrible investment for 10-30 years. OP can just buy US treasuries for that duration and not lose his principal.

To OP, I would only advise buying treasuries. Everything else is too risky in the bond game.

Raving_Cute
Raving_Cute

It's pretty much irrelevant whether you made money on your trade or not. The point is that you overpaid for the bond, and you got less for it when you sold it. Whatever profit you might have been should have been much larger.

Since this seems to be going over your head, I'll give you an easy example. If you bought AAPL from IB at $140/share but found out that someone else could get the same shares at the same time but only pay $120/share, would you be happy? Would it matter that you later sold your shares @ $145? Yes, you made a profit ... but a lot less profit than if you got a good execution price in the first place.

Fortunately, this doesn't happen in the real world because stocks are traded on a public, consolidated exchange. However, bonds are not.

So my example is exactly what you're doing when you buy individual bonds as a small-time investor. Overpaying and underselling. Literally throwing money away.

OP was asking for a primer on bonds
Pretty generous assumption on your part considering that he specifically asked about some meme investment he "read about on Veeky Forums." Besides, if you weren't so busy white-knighting for your boyfriend, you'd have noticed that I linked him to a .... wait for it .... primer on bonds.

Thanks for proving that not everyone who invests at Vanguard is intelligent. I guess you found your way there by dumb luck. Anyone who states: "BND is a terrible investment for 10-30 years" should have their account closed and forced to move to eTrade.

Booteefool
Booteefool

Thanks for proving that not everyone who invests at Vanguard is intelligent. I guess you found your way there by dumb luck. Anyone who states: "BND is a terrible investment for 10-30 years" should have their account closed and forced to move to eTrade.
Why would anyone buy BND when they can buy US treasuries? Are you retarded?

Sir_Gallonhead
Sir_Gallonhead

Hm, I don't know ... maybe diversification, yield, and total return?

Moron.

Spamalot
Spamalot

Hm, I don't know ... maybe diversification, yield, and total return?
Moron.
You can buy treasuries and hold a stock market index fund. You are retarded to think AAA rated bonds are a bad investment. And corporate bonds are terrible. They have high correlation to equities with lower returns. That's not diversification.

Like I said, just buy treasuries and add VOO/SPY to complete your investment.

eGremlin
eGremlin

here is a good primer

Government bonds:
bills, notes, bonds

bills = less than 1 year
notes = 1-10 years
bonds = 10+ years

u.s. government notes and bonds are common choices for "safety" and it means low returns

municipal bonds let you avoid taxes and are loans for city/state things. The yield is usually lower though because of the tax free status

corporate bonds are good for yield and returns because they are usually issued to companies that are deemed more risky or have a complicated history or are new. You can get up to 5-10% here without going too far into junk bonds. The risk is a company has a higher risk to default than the government. The bond rate is based on the credit risk of the company.

Lastly there is zero coupon bonds which gets you no coupon payments but is issued at a considerable discount to par value. That means they ask you to pay 600 today and you get 1000 back after waiting 10 years.

between all of these I would recommend corporate bonds via fixed closed stock or funds. They have active managers who want good returns and select corporate bonds to issue to companies that they think will not be deadbeats. They also are more resistant to interest changes since they tend to be short term length.

AwesomeTucker
AwesomeTucker

I don't agree that all corporate bonds are terrible, especially if you diversify and they have a detailed lending history for you to review their decisions.

cum2soon
cum2soon

Bump to tell people going in too heavy on the bond market is stupid with interest rates soon to spike

5mileys
5mileys

I don't agree that all corporate bonds are terrible, especially if you diversify and they have a detailed lending history for you to review their decisions.
You can diversify with stocks. Corporate bonds don't give qualified dividends, they have equity like risk and interest rate risk. That's three negatives for something worse than equities and bonds.

Playboyize
Playboyize

They have high correlation to equities with lower returns
[citation fucking missing]

You're an asshat for dismissing corporate bonds, which have higher yields and substantially better diversification than "muh treasuries."

You are retarded to think AAA rated bonds are a bad investment.
Um, I said this where? No one said treasuries were a "bad" investment, kid. But they're ultra-conservative and don't deserve more than a partial allocation in a well-constructed portfolio.

Jesus, if you're such a fucking pussy and can't handle the "risk" of corporate bonds (essentially zero), why are you in the markets at all? Just put your shitty savings in your shitty mattress and get off my Veeky Forums.

Corporate bonds don't give qualified dividends
This is 100% absolutely FUCKING wrong.
they have equity like risk
This is ALSO 100% absolutely FUCKING wrong.

Kys, moron.

StrangeWizard
StrangeWizard

This is 100% absolutely FUCKING wrong.

investinginbonds.com/learnmore.asp?catid=10&subcatid=47&id=184
The interest you receive from corporate bonds is subject to federal and state income tax. (If you own shares in bond mutual funds, your interest income will come to you in the form of “dividends” from the fund, but these are fully taxable and are not eligible for the maximum 15% tax rate that otherwise applies to dividends.)

Can you stop embarrassing yourself already? You already demonstrated that you know nothing and regurgitate shit. Shoo child.

Stupidasole
Stupidasole

Here's another link if you're illiterate.

budgeting.thenest.com/bond-etfs-qualified-dividends-24564.html
The tax rate for dividends from a corporate or international bond ETF will be at your marginal income tax rate

Nojokur
Nojokur

interest
dividends
These are not the same words, kid.

Spazyfool
Spazyfool

These are not the same words, kid.
Child, you seem to be confused and butt flustered now. Just go ahead post a link that says corporate bonds pay qualified dividends or shut up and go suck your mommy's tits.

Dreamworx
Dreamworx

NO BOND FUNDS PAY DIVIDENDS. You giant fucking moron, why do I have to explain this you? BONDS PAY INTEREST, NOT DIVIDENDS.

Bond funds also issue distributions, occasionally, which represent the capital gains from the sale of securities. DISTRIBUTIONS, NOT DIVIDENDS. Those distributions are taxed EXACTLY THE SAME AS ALL FUND DISTRIBUTIONS, depending on whether they are ling or short term gains.

You are, without a doubt, the single dumbest streak of shit ever smeared on this board. diaf.

Stark_Naked
Stark_Naked

NO BOND FUNDS PAY DIVIDENDS. You giant fucking moron, why do I have to explain this you? BONDS PAY INTEREST, NOT DIVIDENDS.
What part of
Corporate bonds don't give qualified dividends
Ahaha. You are so retarded you arguing with a strawman. Go ahead and point out where I said corporate bonds paid dividends. Go ahead, retard. Whatever, you can go argue with yourself.

Raving_Cute
Raving_Cute

Corporate bonds don't give qualified dividends
No shit sherlock. NO BONDS PAY DIVIDENDS OF ANY TYPE. Your attempt to suggest that treasuries DO pay qualified ANYTHINGS is 100% WRONG.

Kid, I'll wreck your face all day. Go get some education, you embarrassing fuckwit.

Nude_Bikergirl
Nude_Bikergirl

No shit sherlock. NO BONDS PAY DIVIDENDS OF ANY TYPE. Your attempt to suggest that treasuries DO pay qualified ANYTHINGS is 100% WRONG.
Where did I suggest treasuries paid qualified dividends. Again, you are suffering from mania and reading imaginary texts. Go ahead and point it out, retard.

Lunatick
Lunatick

HURP DERP WATCH ME MOVE THE GOALPOSTS
HURP DERP IGNORE THE POST WHERE I SAID BONDS ARE JUST LIKE STOCKS
Just admit you were wrong, or go away, or kys, or all of the above. You must be 18 to post on this board anyway.

Booteefool
Booteefool

HURP DERP WATCH ME MOVE THE GOALPOSTS
HURP DERP IGNORE THE POST WHERE I SAID BONDS ARE JUST LIKE STOCKS
There were no goalposts moved. You are the one moving the goalpost now. I'm waiting for that quote where I was wrong, besides the fact that corporate bonds are actually terrible. Psst, nothing personnel kid.

Sir_Gallonhead
Sir_Gallonhead

I'm waiting for that quote where I was wrong
bonds have equity like risk

DELIVERED.

buh-bye, faggot

Soft_member
Soft_member

bonds have equity like risk
This statement is factual. It seems you don't understand the CORPORATE RISK. All you do is scream and not post a single proof of your screeching. You already outed yourself as a know nothing retard. Now I'll wait for you to post proof (you won't) about corporate bonds not having risk like equities.

Evil_kitten
Evil_kitten

I'm waiting for that quote where I was wrong
bonds have equity like risk

Someone doesn't know the difference between a creditor and an equity holder.....

Of course he doesn't. He's 12.

takes2long
takes2long

Someone doesn't know the difference between a creditor and an equity holder.....
Again, you are imagining texts that I haven't typed. I said CB had equity like risk not mentioning credit risk of course. The equity like risk comes from losing your entire investment in a company. Is that too hard to understand, son? Take that in before you put words in my mouth again.

idontknow
idontknow

I'm waiting for that quote where I was wrong
bonds have equity like risk

Tell us retard (assuming its not yet past your bedtime) how an unsecured debt obligation has "equity like risk" when it is legally and structurally above equity in priority....

I'll be waiting. Not for a coherent answer, because you can't give one. I'll be waiting for your next embarrassment of a post.

Thanks for the comedy entertainment. Too bad it wasn't intentional.

lostmypassword
lostmypassword

Hey there buddies

hairygrape
hairygrape

Trading bonds on leverage is so easy 1/5th of the time. Outside of that it's a lot of flat action.

Playboyize
Playboyize

i came into this thread to say haha what a retard

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