In your fixed income, you can do individual bond or bond funds (I supposed you can do both). When you use bond fund, you can reinvest the dividend. When you use individual bonds though, the interest can't be reinvested, so you probably hve to reinvested in cash.
I am wondering if this cash drag has an negative effect long term. Right now and in the short term, this is not the case since our yield curve is inverted. If a drag exist, wouldn't TIPS and TIPS fund have less deviation because TIPS automatically reinvest via their inflation component?
I am wondering if this cash drag has an negative effect long term. Right now and in the short term, this is not the case since our yield curve is inverted. If a drag exist, wouldn't TIPS and TIPS fund have less deviation because TIPS automatically reinvest via their inflation component?
Statistics: Posted by gavinsiu — Sat Jul 06, 2024 11:57 pm — Replies 0 — Views 129