Alright, I'll be honest. Bonds confuse the hell out of me. Even though I work in real estate finance and excelled in my finance courses, bond trading has always confused me. My portfolio is significant for my age (23) at $20k. I am currently 60% in equities and 40% in cash. I've kept my cash on the sidelines because I don't think the market is logical about Trump trades.
I've realized, it takes time for markets to turn. While we're on the end of the cycle we're not at the end.I need to put some of my extra cash to work and get it down to 10-15%. I still want to hold some to invest when there's some market reductions here and there.
When rates are increase (the market is expecting 2 more this year), coupons increase, thus bond prices decrease. If I buy a bond, say $PZA or a bond ETF $SCHZ, if rates increase, the coupons held will be increasing and putting downward pressure on the bond price.
Am i getting this right? Could someone walk through more in depth or link a better resource for me to learn?
Submitted June 02, 2017 at 11:10AM by AlphaQ69 http://ift.tt/2rsIPKW
