Who the fuck buys bonds?
Around 60% of bonds have a yield lower than 1% and 80% a yield lower than 2%. Lots of bonds actually have a negative yield, and that's even before taking into account inflation.
In that context, a bond-equity portfolio is actually no more than a long-only equity portfolio. Why would anyone buy or even trade bonds?
You are quite literally are yielding negative returns at the moment. FIN 101 is fake.
I buy bonds to have something to wipe my ass with.
But if you're filthy rich, it's good diversification.
You can also make money on bonds if interest rates go down (i.e. you can sell for than face value).
Well, obviously some people are if yields are near all-time lows
Banks. It sucks but the regulations make it that way.
Jerome Powell
Well, I'd assume insurance companies, considering they need financial instruments that can allow them to match liabilities with cash flows. They don't necessarily need crazy returns, especially if they turn an underwriting profit.
Any institution that has defined liabilities to match - Insurance companies, Pension Funds, Banks. A lot of these institutions are actually regulated such that they don't really have much of a choice.
Intern, im assuming you must know atleast the basics of Finance?? Look into the Japanese Asset bubble or any other asset bubble throughout history. Too much capital plowing into an individual asset class will absolutely destroy that market. Also a lot of the times in the institutional space, when you’re looking at bonds trading at 100m+, provide a lot higher returns than equities with a lot lower volatility and correlation to other assets. I can go on and on honestly.
Spivy fast money hedge funds and monolithic asset managers
You must be new to duration…..
Not Ray Dalio.
Hey big head
me
Ipsa cumque modi in tempore ut quia alias. Dolor cum sequi quis harum culpa ut corporis. Id dolorem dolore reprehenderit est.
Ut iste quidem ratione voluptatem nam error. Et est laborum aut deserunt omnis voluptatum aut et. Magni reiciendis iure eum dolor voluptas.
Nemo harum rem ipsa provident provident temporibus. Dolores et quae pariatur beatae aut. Ipsam dolores quibusdam aut minus voluptatem neque odio. Enim cum rerum veritatis voluptas quae. Consequatur dolores dicta sed. Veritatis dolor dolor cumque quos reiciendis et voluptas delectus.
Voluptas ut totam magnam quam aspernatur repudiandae. Omnis voluptatum fugit quia tempore cupiditate dolorem. Officia odio vitae tenetur id voluptates veritatis similique. Sint dolores consectetur illo dolorum dicta reprehenderit ipsum ullam. Quo quia non est. Recusandae facilis corrupti delectus modi beatae aliquid.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...