Are short term bond funds OK to be in at this time.
Answers
247 points
Market101 answered 4 months ago …
With interest rates at a bottom I wouldn't think anybody would want to buy into peak bond prices - there's nowhere they can go but lower. And yields aren't nearly what they were a few years ago, not much upside here.
I'd be looking for bargains in beaten down equities right now or try to find some macro plays via ETFs. Sector rotation has been doing well for a lot of folks lately.
186 points
HoughtonAndAtkeson answered 3 months ago …
We study investment-grade, high-yield and credit default swaps to gain insight into the debt world. We've been monitoring short-maturity bonds where we would typically expect to see yields of 2.2% to 3% for investment-grade bonds with the Fed Funds rate at 2%.
In most cases -- including some very large, well-respected companies -- we are seeing yields above 5%. This suggests that we could see many well-known companies default and/or many large bondholders collapse.
