RetireJapan

Bubblegun wrote: ↑Sat Feb 10, 2024 12:28 pm 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.

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.

RetireJapan wrote: ↑Sat Feb 10, 2024 1:59 pm Very old blog post: https://www.retirejapan.com/blog/bonds/

I use the eMaxis Slim developed country bond fund.

Tsumitate Wrestler wrote: ↑Sat Feb 10, 2024 3:25 pm

Bubblegun wrote: ↑Sat Feb 10, 2024 12:28 pm 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 wrote: ↑Sun Feb 11, 2024 9:44 pm 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.