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Bond Funds are Losing Money

If you own a bond fund, you’re likely losing money.  Perhaps a lot of money.

As interest rates rise, the value of bonds fall.  Since hitting a peak in July, the 20 year Treasury Bond Fund TLT is down 17%.  This is a surprise to many investors because they consider bonds to be “safe”.

If the Trump stock market rally continues, watch for bonds to fall further.  A key support level for TLT is 112.  If TLT falls below that level it is likely to mimic the declines of 2013, possibly declining another 15-20%.

Be cautious, bond funds are NOT SAFE!


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