The names Bond.

[Bubblegun]

We have most of our savings now in stocks and shares,(s&p and Nasdaq) and we have about 6 years before we start to reduce our work and maybe semi retire.but I’m starting to think about bonds. No! Not James Bond or even Brook bond, but Bond funds? Any advice would be appreciated.

[RetireJapan]

Very old blog post: https://www.retirejapan.com/blog/bonds/

I use the eMaxis Slim developed country bond fund.

[Tsumitate Wrestler]

We have most of our savings now in stocks and shares,(s&p and Nasdaq) and we have about 6 years before we start to reduce our work and maybe semi retire.but I’m starting to think about bonds. No! Not James Bond or even Brook bond, but Bond funds? Any advice would be appreciated.

For Japanese investors bonds are a bit of a raw deal. The currency risk element strips away a lot of the attractiveness, and "risk" free domestic bonds have virtually no yield.

The last few year should make most bond investors reexamine why the hold bonds in my opinion.

[sutebayashi]

I’m happy with my bond fund - same as RJ, and I have some in US ETFs too.

I think it depends on your plan.

If you want to put the money away for 20+ years then sure all equities makes sense.

I’m never quite sure myself, and if stocks do go down 30-50% I think I will be happy to rebalance my portfolio, selling down bonds (which I presume would not fare so poorly in such a situation) and buying more equities cheaper.

Or if I just need money five years from now, if my equities are down big time I will be happy to have some bond fund to sell instead.

I try to go by data these days… the data at myindex.jp for bonds doesn’t give my the impression that much has changed, although yields were lower over the last decade than the prior two. (I’m thinking yields will be a bit higher again over the next decade or two at least.)

[Tsumitate Wrestler]

https://www.morningstar.com/economy/wor ... arket-ever

In 2010, the financial press printed story after story about the great bond bubble. Those predictions turned out to be, as Mark Twain famously stated about the reports of his death, premature. Although bond yields did rise shortly after those articles were published, they soon settled back down. Ten years later, the yield on intermediate-term Treasury notes had dropped below 2010 levels. The great bond bubble was no such thing.


However, if the timing of the warnings was misplaced, the sentiment was not. Buying securities when their prices are unusually high, in the belief they will grow higher yet, can be a profitable strategy. It was for buyers of Japanese stocks in the mid-1980s, internet-stock enthusiasts in the late 1990s, and Treasury investors a decade ago. But, as recent events have demonstrated, such a strategy is nothing if not dangerous.

Just some thoughts.

[Bubblegun]

Very old blog post: https://www.retirejapan.com/blog/bonds/

I use the eMaxis Slim developed country bond fund.

Thank you for that. I was wondering what the returns on these funds are.
I'm not able to find much on it in terms of actual returns, and I was wondering if you could share some real facts and figures.
I seem to be more at a loss and riding the S&P500 rollercoaster. I've seen a lot of ups and downs, from black Wednesday, dot com implosion, Lehmans, the Pandemic, and now there is the AI high. which to be honest might be similar to the dot come bubble, so I would like to reduce the screams on the roller coaster....if possible.

[Bubblegun]

We have most of our savings now in stocks and shares,(s&p and Nasdaq) and we have about 6 years before we start to reduce our work and maybe semi retire.but I’m starting to think about bonds. No! Not James Bond or even Brook bond, but Bond funds? Any advice would be appreciated.

For Japanese investors, bonds are a bit of a raw deal. The currency risk element strips away a lot of the attractiveness, and "risk" free domestic bonds have virtually no yield.

The last few year should make most bond investors reexamine why the hold bonds in my opinion.

This is what I was originally thinking. Because if bonds aren't worth it. Does this mean we are basically on the roller coaster ride of the S&P500/Nasdaq/Nikkei 225? The Japanese bonds are about as good as what the banks give, and that's not even enough to buy some toilet roll.
The other bonds globally would also be at the whim of currency exchange. Of course, if I was in the US/UK then it might be worth putting some in bonds as the return beats inflation. So I'm a bit at a loss now.
Is it financially worth it? or is there more of an emotional return?
http://www.worldgovernmentbonds.com

[sutebayashi]

I’d try pulling up the performance stats for the eMAXIS slim developed bond fund at your brokers website, and seeing how it’s done over the past 5 years.

I still have holdings in the older fund before the slim one was introduced, but looking at the new slim one, the total return over the last 5 years was 4.92%, and the sharpe ratio was 0.9, indicating (I think) good return relative to the amount of risk taken.

[Bubblegun]

I’d try pulling up the performance stats for the eMAXIS slim developed bond fund at your brokers website, and seeing how it’s done over the past 5 years.

I still have holdings in the older fund before the slim one was introduced, but looking at the new slim one, the total return over the last 5 years was 4.92%, and the sharpe ratio was 0.9, indicating (I think) good return relative to the amount of risk taken.

Thanks for that. 4.92 is certainly more than what i got for an investment over 25 years on something else.

Well in my post yesterday about whether are we entering a bubble, especially around the AI boom. This article came up, which echoes my sentiments. I always wondered, how a company just stuck a dot com on a name and is suddenly worth billions even though there were no profits. I wonder about today....Just say Ai and the stock market seems to be going through the roof. ARM, NVIDEA etc.
It might be too late to rebalance this year, but I think i will certainly do something next year.
https://www.japantimes.co.jp/commentary ... w-sp-boom/

[northSaver]

Not really an AI stock, but take UBER... they posted their first annual profit last week (in almost five years), yet their stock has gone up 98% in the last 12 months, and 76% in the last 24 months. Makes you wonder.