Seeking Alpha

All You Need To Know About Investing In Bonds Now (Video)

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Includes: ACP, AIF, ANGL, ARDC, BIL, BOND, CIF, CIK, DFVL, DFVS, DHG, DHY, DLBL-OLD, DLBS, DSU, DTUL, DTUS, DTYL, DTYS, EAD, EDV, EGF, FALN, FHY, FIBR, FTT, GBIL, GGM, GOVT, GSY, HIX, HYDD, HYG, HYIH, HYLD, HYLS, HYT, HYXE, IEF, IEI, IVH, JNK, JQC, JSD, KIO, MCI, MHY, MPV, NHS, PCF, PHF, PHT, PLW, PST, RISE, SCHO, SCHR, SHV, SHY, SJB, SPHY, SPTI, SPTL, SPTS, TAPR, TBF, TBT, TBX, TLH, TLT, TMF, TMV, TTT, TUZ, TYBS, TYD, TYNS, TYO, UBT, UJB, UST, VGIT, VGLT, VGSH, VLT, VUSTX, WFHY, ZROZ
by: Sven Carlin
Sven Carlin
Growth at reasonable price, long-term horizon, book author, Fund Manager
Summary

Bonds are in a 35 year bull market. What happens if we see a scenario like that of 1950 to 1981?

Are high-yield ETFs the way to go in order to get at lease some yield?

How much can you lose in Treasuries if the yield goes up 1% or even 10%?

I discuss the risks and rewards of investing in bonds at this point in time.

Few of you know that bonds (NYSEARCA:BOND) had the nickname 'certificates of confiscation' back in the 1970s because investors kept seeing their money disappear due to higher yields and inflation.

At this point in time Treasuries (SHY, IEF, TLT) have historically low yields while the risks coming from higher yields or inflation are significant and do not cover for the rewards.

In my video I also discuss the risks and rewards of owning high yield or junk bond ETFs (HYG, JNK) with their attractive yields of above 5%. While the yield might be tempting there are some hidden risks that few discuss, and I dig into what an ETF owns and the liquidity of such underlying assets to show you what is beyond the high yield and the actual risk.

Enjoy the video, and I am looking forward to your comments - or, I should say, I am ready for your comments, as this video will probably infuriate some.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.