3Yr·

With a current interest rate of around 6.2% and medium risk, I am once again increasing my bond holdings. For me, this is currently a good alternative to fixed-term deposits.

08.05

Xtrackers High Yield Corporate Bd ETF

Bought x450 at €11.28

€5,075.10

8 Comments

Epi@Epi

3Yr

6.2%pa interest with 6.2%pa price loss. How do you deal with price fluctuations? Do you include them in the comparison with overnight money?

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TomTurboInvest@TomTurboInvest

3Yr

@Epi how do you come to -6.2% price loss at purchase yesterday? I expect only minor interest rate increases in the U.S. (🔮), so I rate the risk of major price losses as "medium", but I don't know. 2.5-3% on overnight money, I still have about 3% reserve for price fluctuations.

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Epi@Epi

3Yr

@TomTurboInvest So once again: - 6.2%pa! Look at the annual chart. You're not getting 6.2% interest since you bought it yesterday. If you get, say, 7% interest over the next 12 months, but you're down 7%, what's in it for you? That was my question. I really have it because I find corp bonds quite interesting, but I couldn't bring myself to buy them.

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TomTurboInvest@TomTurboInvest

3Yr

@Epi one year back are already the -6.2%, but there has also done a lot with the interest rates, and every interest rate hike affects with price corrections of the current bonds, otherwise they would become uninteresting. now that we are approaching the interest rate peak 🔮, I no longer see such price fluctuations. Therefore, this was now also a purchase for me. My conclusion: price risk for me manageable, interest good...

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Epi@Epi

3Yr

@TomTurboInvest Okay, I see, you are betting on stagnating or falling interest rates. Then the purchase makes sense. In the best case you have 6-7% interest plus price gain. This could work out well! Good luck!

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Rick Moyer@Rick

1Yr

@TomTurboInvest Can you tell me how it behaves in terms of tax? Reporting fund?

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TomTurboInvest@TomTurboInvest

1Yr

@Rick paid 27.5% capital gains tax as normal, profit and distribution

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Rick Moyer@Rick

1Yr

@TomTurboInvest thanks for the feedback ;)

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