Comments on: Bonds: The Next Bubble to Burst? * http://dividendsvalue.com/3764/bonds-the-next-bubble-to-burst/ Dividend Investing & Value Investing For A Superior Portfolio Mon, 11 Apr 2011 13:45:49 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Money Hacks Carnival #75 – Get a Job Edition! | My Life ROI, Getting the Best Return On Life http://dividendsvalue.com/3764/bonds-the-next-bubble-to-burst/comment-page-1/#comment-9961 Money Hacks Carnival #75 – Get a Job Edition! | My Life ROI, Getting the Best Return On Life Wed, 29 Jul 2009 10:49:41 +0000 http://dividendsvalue.com/?p=3764#comment-9961 [...] presents Bonds: The Next Bubble to Burst? posted at Dividends [...] [...] presents Bonds: The Next Bubble to Burst? posted at Dividends [...]

]]> By: Dividends4Life http://dividendsvalue.com/3764/bonds-the-next-bubble-to-burst/comment-page-1/#comment-9805 Dividends4Life Sat, 25 Jul 2009 14:07:32 +0000 http://dividendsvalue.com/?p=3764#comment-9805 TMT: You are exactly correct about BLV falling faster when the rates begin to rise. I suspect, but haven't tested it, that BLV will have higher price volatility than BIV, while BIV will have higher income volatility. I am looking for more income stability than price. Best Wishes, D4L TMT: You are exactly correct about BLV falling faster when the rates begin to rise. I suspect, but haven’t tested it, that BLV will have higher price volatility than BIV, while BIV will have higher income volatility. I am looking for more income stability than price.

Best Wishes,
D4L

]]> By: TMT http://dividendsvalue.com/3764/bonds-the-next-bubble-to-burst/comment-page-1/#comment-9790 TMT Sat, 25 Jul 2009 05:12:05 +0000 http://dividendsvalue.com/?p=3764#comment-9790 I understand about the TIPS. As for duration, if you look at the Vanguard website you can see that BLV has an avg maturity of 21.5yrs & avg duration of 11.6 yrs while BIV has avg maturity of 7.6yrs and Duration of 6.3 years. This tells me as interest rates begin to rise BLV is going to decrease in price a lot quicker than BIV. From your comment it does not sound like you take this into consideration when you buy a bond ETF. I understand about the TIPS.

As for duration, if you look at the Vanguard website you can see that BLV has an avg maturity of 21.5yrs & avg duration of 11.6 yrs while BIV has avg maturity of 7.6yrs and Duration of 6.3 years.

This tells me as interest rates begin to rise BLV is going to decrease in price a lot quicker than BIV.

From your comment it does not sound like you take this into consideration when you buy a bond ETF.

]]> By: Dividends4Life http://dividendsvalue.com/3764/bonds-the-next-bubble-to-burst/comment-page-1/#comment-9711 Dividends4Life Thu, 23 Jul 2009 11:40:37 +0000 http://dividendsvalue.com/?p=3764#comment-9711 TMT: Now, I am only buying bond ETF. I have looked and am still considering TIPS. Current results have underperformed, but I am also looking at them from a longer term perspective. Best Wishes, D4L TMT: Now, I am only buying bond ETF. I have looked and am still considering TIPS. Current results have underperformed, but I am also looking at them from a longer term perspective.

Best Wishes,
D4L

]]> By: TMT http://dividendsvalue.com/3764/bonds-the-next-bubble-to-burst/comment-page-1/#comment-9679 TMT Wed, 22 Jul 2009 18:45:19 +0000 http://dividendsvalue.com/?p=3764#comment-9679 Do you risk weight your bond portfolio, trying to ladder some of the duration risk? Also I noticed the TIPS were not on your list. Have you been looking there? Do you risk weight your bond portfolio, trying to ladder some of the duration risk?

Also I noticed the TIPS were not on your list. Have you been looking there?

]]> By: Daniel M. Ryan http://dividendsvalue.com/3764/bonds-the-next-bubble-to-burst/comment-page-1/#comment-9641 Daniel M. Ryan Wed, 22 Jul 2009 04:42:32 +0000 http://dividendsvalue.com/?p=3764#comment-9641 Best of luck, but bonds have been in a long-term bull market for about 28 years. The previous bear market was from 1949 to 1981, or about 32 years. I'm not plumping for market timing when I note this, nor an I arguing with your asset allocation advice. Even though bonds turned in '49, if memory serves me correctly, bondholders did all right in the next fifteen or so years. Of course, that was during an era when the budget was expected to be balanced over a whole business cycle: deficits in bad times were expected to be cancelled out by surpluses in good. Best of luck, but bonds have been in a long-term bull market for about 28 years. The previous bear market was from 1949 to 1981, or about 32 years.

I’m not plumping for market timing when I note this, nor an I arguing with your asset allocation advice. Even though bonds turned in ’49, if memory serves me correctly, bondholders did all right in the next fifteen or so years. Of course, that was during an era when the budget was expected to be balanced over a whole business cycle: deficits in bad times were expected to be cancelled out by surpluses in good.

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