Stocks were down -0.06%
Bonds were down -0.12%
US Dollar was fairly unchanged versus a basket of world currencies, and the Euro
Asian & European stocks were down a little.
Gold was down.
Oil was up.
What was an under-recognized, but important story today in asset classes?
While the Yahoo! headline focused on stocks: “Wall Street Dips From Multiyear Highs”
Maybe a more important, and often quieter, trend was: Bonds continued to decline in price.
BND, the Vanguard broad bond ETF, declined -0.12%, a significant drop for bonds. More notably, as shown in the image below, bonds are declining to around 9-month lows.
Bonds and stocks often move in contrary pricing directions. But today, stocks began down, and bonds also began down, staying down the whole day.
Why am I focusing on bonds’ decline in price?
To create wealth, you have to know where to focus your attention, when more people are focused on other things.
I don’t have time today to re-visit widely-expressed concerns about bonds. But in summary: With interest rates at historically-low and governmentally-altered levels, risks to bond principal values appear to still be strong.
A natural question that comes to mind might be: If bonds are near the low end of their one year price range, shouldn’t a person buy more bonds? Maybe. Maybe not. But to understand bond valuations, it is probably better to look at a chart for bond prices going back to 1980, or even 1970 or further back.
These are issues worth discussing with your financial advisors in this time window.
Disclaimer: These posts are not written by a professional or licensed financial advisor. There’s nothing for sale here. This is just a discussion forum. No one should make any decisions based on representations made on this informal blog. These posts are just one layperson’s opinions, concerns, and observations about asset classes – a part of larger, never-ending discussions. Any significant financial decision should be discussed with at least a few trusted and experienced financial advisors before acting.