I am considering moving a lot of my bond money, to lean towards corporate bonds. I would love some input. My reasoning, which I would appreciate your input, is the following:
From a payer risk management perspective, are we more likely over the next 20 years to get paid back in full+coupon, from the US Government or high quality investment grade corporate bonds.
My answer would be, at the current and projected future US Govt finances (debt, interest burden) - there is LESS risk investing in high grade corporate bonds, as they as a whole manage finances much better.
What would happen if there is a government debt jubilee, or governments cap all currently issued bonds to say 1% bc they can’t afford the debt? How would high grade corporate bonds likely react in that scenario (if the corporations don’t follow suit w yield curve control etc).
These are hypothetical, but from a risk management perspective, do you feel I should have 75% high grade corporates, and 25% govt bonds? Or an 50/50 split? And further diversity to global bonds…? The US govt financial picture w deficit spending and needing to refinance trillions of dollars over the next couple years, is quite concerning.
Thank you!
From a payer risk management perspective, are we more likely over the next 20 years to get paid back in full+coupon, from the US Government or high quality investment grade corporate bonds.
My answer would be, at the current and projected future US Govt finances (debt, interest burden) - there is LESS risk investing in high grade corporate bonds, as they as a whole manage finances much better.
What would happen if there is a government debt jubilee, or governments cap all currently issued bonds to say 1% bc they can’t afford the debt? How would high grade corporate bonds likely react in that scenario (if the corporations don’t follow suit w yield curve control etc).
These are hypothetical, but from a risk management perspective, do you feel I should have 75% high grade corporates, and 25% govt bonds? Or an 50/50 split? And further diversity to global bonds…? The US govt financial picture w deficit spending and needing to refinance trillions of dollars over the next couple years, is quite concerning.
Thank you!
Statistics: Posted by dcarste — Wed Aug 14, 2024 10:20 am — Replies 3 — Views 174