8Mon
First of all: just because the strange GQ AI warns you about something doesn't mean it makes sense. It marks Allin Bitcoin deposits with 10/10 for risk, Allin building society deposits with 3/10. So much for that. 😅
Otherwise, bonds are a fairly complex field. More complex than equities, and the market as a whole is also larger and more informed. Before you make any decisions, I would delve deeper into the matter. Keywords: bonds vs. bond ETFs, government bonds vs. corporate bonds, high grade vs. high yield, long duration vs. short duration, currency-hedged vs. unhedged, inflation-protected vs. nominal.
And you would have to combine all this information sensibly with an overall portfolio concept. Keywords: max return vs. min risk, correlations vs. hedging, diversification vs. concentration.
Have fun! 😁
Otherwise, bonds are a fairly complex field. More complex than equities, and the market as a whole is also larger and more informed. Before you make any decisions, I would delve deeper into the matter. Keywords: bonds vs. bond ETFs, government bonds vs. corporate bonds, high grade vs. high yield, long duration vs. short duration, currency-hedged vs. unhedged, inflation-protected vs. nominal.
And you would have to combine all this information sensibly with an overall portfolio concept. Keywords: max return vs. min risk, correlations vs. hedging, diversification vs. concentration.
Have fun! 😁
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8Mon
@Epi Thank you very much. Yes, of course I wasn't serious about the AI. :D I've also noticed that some of the ratings are very questionable.
Thank you for the key points. The focus would certainly be on high-yield corporate bonds. I also read an interesting paper on this recently that was presented by Luis Pazos. :)
Thank you for the key points. The focus would certainly be on high-yield corporate bonds. I also read an interesting paper on this recently that was presented by Luis Pazos. :)
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8Mon
@_xempex_ If you take up a new asset class, ask yourself why and whether this goal cannot also be achieved with equities. High yield corp bonds, for example, are highly correlated with equities and pay out dividends like dividend stocks. As a private investor, I don't see any added value in the portfolio. In addition, they are currently overvalued, i.e. the spread to high grade corp bonds is historically low. So no good CRV there either.
What is generally worth considering are ETFs with long-dated government bonds. Due to the interest rate turnaround, they are 50% below their old ATHs. And they normally benefit when central banks cut interest rates quickly during an equity crash. Here you would have an asset that takes some of the risk out of the portfolio. However, I fear that this would not be a good idea in the current situation of escalating government debt.
That leaves gold. Why? Because it works like an interest-free bond with an infinite term. With 20% in your portfolio, you can reduce the maximum drawdown of a share portfolio by around 30%.
What is generally worth considering are ETFs with long-dated government bonds. Due to the interest rate turnaround, they are 50% below their old ATHs. And they normally benefit when central banks cut interest rates quickly during an equity crash. Here you would have an asset that takes some of the risk out of the portfolio. However, I fear that this would not be a good idea in the current situation of escalating government debt.
That leaves gold. Why? Because it works like an interest-free bond with an infinite term. With 20% in your portfolio, you can reduce the maximum drawdown of a share portfolio by around 30%.
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@Epi great, thank you very much! That takes some of my borrowings -Fomo out of the game now and I can deal with it in peace! :)
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