If you back test corporate bond vs intermediate treasury, the difference in return is about 1.37% from 2003 to 2024. This quite sizable and may be worth holding corporate bond fund over a intermediate treasury. However, I feel that if you buy individual bonds, a bad call could wipe out a good chunk of your return. Companies like Lehman brothers and Enron seems pretty solid until they were suddenly wiped out. Corporate bonds are also recallable, resulting in interest rate risk at the wrong time.I am a big fan of bonds. I am talking about the concept itself, notwithstanding the disaster we had in 2022![:wink:]( "Wink")
I am wondering if buying individual bonds would actually be a nice hobby in retirement.
Bascially, what I would do is get familiar with and watch about 100 bonds (or rather 100 issuers and a bit more bonds) and also buy and sell them at a profit (determine a typical range within which they trade).
So two possible outcomes would be either holding to maturity or selling at a profit (when some type of formula determines it's more profitable to sell then hold).
I am talking about bonds issued by T-Mobile, AbbVie, Bank of America, Pfizer, JPMorgan Chase, Boeing Co., Citigroup Inc., Amgen, Verizon, Wells Fargo, Intel, Morgan Stanley, Walt Disney, AT&T, Broadcom, Johnson&Johnson, CVS, etc., you get the picture.
Also there would be some rule in place that each issuer is no more than 1% of this "experiemental" portfolio.
Sounds like a fun thing to do for a few hours a week, eh?
Statistics: Posted by gavinsiu — Sun Oct 06, 2024 10:18 pm — Replies 48 — Views 5508