Here are 2 charts of US Bond fund FXNAX and Fed interest rates from Dec 2018 to Dec 2023
FXNAX vs Fed interest rate
from the charts you can see
1 - The bond fund peaked when Fed rate dropped near 0
2 - The bond fund continue its decline until Oct 2023
Looks like it's directly correlated to the anticipation of rate hike - 1. It peaked around Apr 2020 as Fed had no room to further cut rate - it's near zero. 2. around Oct 2023, FXNAX finally stopped the dropping and moving up - as more and more data indicates inflation is under control and further rate hike anticipation dissipated.
I have been DCA into FXNAX since beginning of the year and I want to accelerate the process in next couple of months, not sure if this is 'timing the market' but I don't think Feds are going to significantly raise the rate.
Do you think this strategy is flawed? If so why?
Thanks!
Submitted December 03, 2023 at 01:02AM by grey-owl https://ift.tt/SoJ9wLj
