Tuesday, September 7, 2010
Is your Retirefund swimming in bonds? Beware the under tow, and the sharks!
The massive rush into the bond market this year could be the top of a bubble that will sink many investors who believe (wrongly) that bonds are always a safe bet when allocating your retirefunds.
On the contrary, bonds can bubble like any other investment, and that bubble is starting to become so obvious, a bust may be lurking as early as this fall.
The bond market is beginning to send out warning signs and you ignore those signs at your financial peril. Last weeks stock rally, as short as it was, came at the expense of the bond market, and in your case (retail investors) bond funds.
Anyone reading these posts knows full well my aversion (distaste, distrust and dissatisfaction) of the managed mutual fund industry, and that, my friends, surely includes managed bond funds. (see: Average investors getting screwed)
Those fund managers will make their outrageous fees until the exodous (which they will lead) when this market pops, and it will pop. You my friends, will be left holding the bag of worthless paper once more, unless of course, you get out now while the getting is good.
The first sign of any interest rate hikes will tip this baby elephant over the cliff.
Don't wait for that, because the big dogs will see it coming long before you do and they run a lot faster than you can.