lubbers_kurt

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  • in reply to: Baby-boomers and Bond Interest Rates #16083
    lubbers_kurt
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    When interest rates do rise, what do you think the possibility is of a mass exodus from bond mutual funds/etfs? In addition to my TSP, I keep some medium to long term savings invested in broad index stock/bond funds in a roth ira. I understand the mechanics of declining value in bond funds during a rising interest rate environment but do you think that bond funds may also carry “redemption risk”? Or, as you wrote in your previous post, have the majority of investors anticipated rising interest rates for years and those who will exit bond funds already have? If a mass exodus from bond funds occurs, what do you think the timeframe would be for recovery? Has anything like this occurred during previous periods of rising rates?

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