Do any advisors in the financial planning community even conceptually understand what a long -
term bond bear market looks like these days?
Not exact matches
Intermediate -
term bonds were up an average of more than 7 percent, earning a spread of more than 37 percent in outperformance over stocks during a
bear market.
The following table shows how intermediate -
term bonds performed over these same
bear markets:
It should be noted that during a major
bear market or correction
bond funds, especially, short
term bond funds, are the ballast in your account and either stay the course or recover much quicker than the broader
market as a whole.
Since
bear markets can last 2 - 3 years, a 2 year Treasury
bond still counts as a «long
term»
bond in this situation.
Maintaining reserves in cash, cash equivalents (e.g., CDs) and short -
term bonds can help you withstand most
bear markets.
Nevertheless, a sustained break above the 5.5 percent level on benchmark U.S. Treasury note yields would almost certainly signal the dawn of a long -
term bear market for
bonds, according to Louise Yamada, founder of Louise Yamada Technical Research Advisors LLC.
You can also consider buying a short
term Treasury
bond (e.g. a 2 year
bond) when you think a
bear market is imminent.