It's a total Return class A . Last summer Ilost $586 from my $12750 initial IRA purchase. I thought bonds do well when Interest rates are Low. what gives?
2007-03-13 14:01:25 · 4 answers · asked by K(old man) 2 in Business & Finance ➔ Investing
When you buy a bond fund that has a front-end load of, say, 5%, it's going to take you about one entire year to make up for that load. If it's a bad year for bonds, it will take you even longer than that. This is why load funds should be avoided, if at all possible.
Bonds do well when interest rates are GOING down, or about to go down. Until recently, they've been going up. If the Fed starts cutting rates again, bonds should do well again (for bonds).
2007-03-13 15:55:41 · answer #1 · answered by LongArm 3 · 0⤊ 1⤋
Bonds do well when interest rates MOVE lower, not when interest rates are low. In a stable interest rate environment, I'd rather have high interest rates. You get a high yield, and if rates move down, you get capital gains on the bonds as rates move.
2007-03-14 06:19:34 · answer #2 · answered by Quixotic 3 · 0⤊ 0⤋
write the 586 off on your taxes (you have a percentage off loss that is tax deductible)...and it depends on how long you've been in that fund (if longer than a year, re-allocate your portfolio)...add 50/50 ratio in stocks and bonds...so if bonds are down, then stocks are up or vice-versa...that's why you need to have both in your portfolio to cover your downsides
2007-03-13 14:17:33 · answer #3 · answered by Cutie Patootie 2 · 0⤊ 1⤋
interest rates are on the high side now. They are projected to come down though.
2007-03-13 14:21:48 · answer #4 · answered by Modus Operandi 6 · 0⤊ 1⤋