/biz/ - Business & Finance

>>51708006
Reminder that you should only ever hold extended long term bonds. Anything else is just shooting yourself in the foot

>>51700929
Bogleheads get a lot right but they are too stubborn for their own good and miss a lot of obvious shit that's not even market timing. Take bonds for example.

They tell everyone to just BND or FXNAX and chill, a total bond fund. But the average duration of those bonds is 7 years. If you're in your 20s or 30s or 40s, why the hell are you buying a bond fund that has a maturity of 7 years when you are 25+ years from retirement?

Time horizon is when you buy the bonds that have a duration that match your time to retirement and its been repeatedly shown to be a fantastic idea. They like to bitch and moan about long term bonds being riskier but that risk pays off especially if you are talking about long term investing. EDV is the longest duration bond etf there is and before this crash (because interest rates are going up and better bonds are coming out) it was at 8% annualized returns. That's fucking amazing for bonds. AND the longer a duration the better inverse correlation with stocks which makes it even better for "balancing out a portfolio"

they like to complain about how longer bonds crash harder, but their performance is so great that the crash is never more than the gains they made, and the crash is great because your yield is spiking anyways and now the fund can buy even better bonds