Forgive me for the repetition, but it is extremely important to point out that the change in NAV or bonds ETFs are not relevant to the medium to long term investor.eyeswideshut wrote: ↑Thu Sep 29, 2022 3:14 amThe theory - debatable if it actually works in practice - is that having bonds is a ballast to your equities that allows you to rebalance into stocks whenever the market crashes. The problem this year is that long bonds are down almost as much as equities meaning there is no rebalancing premium. This is why I am re-considering my roughly 20% allocation to them and instead wondering if a managed futures hedging strategy might be better - or even just cash in a fixed term deposit. 100% equities is too much volatility for me - I need to sleep at night.Sure, I concede that -4% is better than -8.5%. And I understand that some people (less individuals, more institutional) may have needs for such a product. But as someone with a long-term horizon, and without liquidity needs in two years, these kinds of numbers don't interest me in the least. And nor should it interest anyone else on this board who is still in the accumulation phase of life, saving/investing towards retirement.
The yield/coupon is what matters.
.....
When you buy a physical bond that return is guaranteed. You simply need to hold it until duration. The same is true with bond ETFs, you hold them for the coupons, not the NAV.
The fluctuations in the sale price of said bonds is not important.