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Your friend needs to learn to read a chart. For bonds, stocks, currency or anything, even real estate.jademann wrote:A friend of mine retired 3 years ago and being financially conservative and cautious put most of his money into bonds and almost none in the stock market.
He doesn't understand why he has lost so much money. Seems unfair to me also.
The worst thing is he has to draw on this money now, he can't wait it out.
Is there any hope that he can ever recover from this?
If I remember correctly, it's the first time ever (so far) that bond was down more than stocks.jademann wrote:A friend of mine retired 3 years ago and being financially conservative and cautious put most of his money into bonds and almost none in the stock market.
He doesn't understand why he has lost so much money. Seems unfair to me also.
The worst thing is he has to draw on this money now, he can't wait it out.
Is there any hope that he can ever recover from this?
For most people, the best way is to buy and hold, so I don't think he did anything wrong. I too hold long term bond to follow the classical investment strategy, say, 60% in fixed income and 40% in equity. He was just unlucky that he need sell the long term bond now (just like the Silicon Valley Bank). In the end we all will need some lucks so inevitably sometimes we'll have bad lucks. Don't think anything we can do to prevent bad lucks otherwise we'd be the richest man in the world now.jademann wrote:JFR, he doesn't trade so he has never used a chart unfortunately for him.
I never use bonds however I am wondering if they are something to consider here and now.
I probably wouldn't have sold because I wouldn't have believed that what has happened could happen.
As Cobra said it is the first time this has happened.
I agree inflation and rates have to come down for a recovery.
I will probably wait for this even if I miss buying the bottom.
Maybe we should say it's all the Fed's fault. We paid them very high salary to let them watch the inflation yet they failed.Cobra wrote:If I remember correctly, it's the first time ever (so far) that bond was down more than stocks.jademann wrote:A friend of mine retired 3 years ago and being financially conservative and cautious put most of his money into bonds and almost none in the stock market.
He doesn't understand why he has lost so much money. Seems unfair to me also.
The worst thing is he has to draw on this money now, he can't wait it out.
Is there any hope that he can ever recover from this?
I too lost a lot holding long term bond. My short term bond gained though.
As for "recover", needs the inflation to go down which in theory shouldn't be easy. We could be in the high inflation era now as "De-globalization" is underway which means everything would be more expensive.