11-06-2016, 10:18 AM
I was wondering about your thoughts on bond mutual funds, specifically in retirement accounts?
I have two bond mutual funds in my kplan, Pimco Total Return and Pimco Real Return.
Personally, I have mixed emotions about bond funds. Right now, the yields are at their lowest while their prices of the funds are at some of their highest. In other words, you're spending a lot of money for very little yield, taking on a lot more risk then one realizes. I worry about the herd mentality, the bond bubble and that if there was to be a market correction, or recession that these bond funds might not be as protective as one might assume, completely negating the phrase, "No one appreciates bonds until a market downturn."
I'm not talking about regular bonds, just your opinions on bond mutual funds.
I've been thinking about bailing on them.
I have two bond mutual funds in my kplan, Pimco Total Return and Pimco Real Return.
Personally, I have mixed emotions about bond funds. Right now, the yields are at their lowest while their prices of the funds are at some of their highest. In other words, you're spending a lot of money for very little yield, taking on a lot more risk then one realizes. I worry about the herd mentality, the bond bubble and that if there was to be a market correction, or recession that these bond funds might not be as protective as one might assume, completely negating the phrase, "No one appreciates bonds until a market downturn."
I'm not talking about regular bonds, just your opinions on bond mutual funds.
I've been thinking about bailing on them.