If you buy corporate bonds now, are they likely to be worth more in the next panic?

Discussion in 'Trading' started by crgarcia, Dec 22, 2009.

  1. Fed says (and it's likely) that they will keep interest rates low for a low time.

    However, in the next panic:
    Will masses flee to bonds, or will they dump everything?

    (meanwhile you earn interests -real money you can spend- on your bonds).
  2. What is a long time? What about the war debt. Hope you are old enough to remember the last war that we lost.
  3. What if the next panic isn't for ten years?
  4. sjfan


    Wtf are you talking about again? Corporate bond spreads are at the tightest to tsy since 2006. You'd be crazy to buy corporate bond now.

    Perhaps you mean buying treasury? Front end tsy are not exactly yielding very much. You'll need to buy a curve flattener at a point in time when the curve is extremely steep.

    Once again, crgarcia is talking about stuff he doesn't know anything about.

  5. The last Bond Panic was 1994. I wouldn't be long Bonds at this point. But I think we're along way from a panic.

  6. I think the OP is confusing corp and govt bonds... Corp bonds are risky. Why would you want to buy a risky asset during a panic?
  7. haha the "panic" is likely to be caused by some type of corporate bond default or sovereign debt default. corporate bonds are one of the last places you will want to be.

    short term US tresuries is where you want to be.
  8. The OP is not the sharpest knife in the drawer!
  9. 007Arb


    Since mid December of 2008 junk bonds have been in the midst of their greatest rally in history and shows no signs of abating. In fact, today was the 16th consecutive trading session of historic highs in the Merrill Lynch High Yield Master II Index, the proxy for junk bonds. While I think there could be more gains ahead in 2010, albeit much more restrained than in 2009, if you missed this once in a lifetime party, I would think now it's a tad late to be joining.
  10. Meanwhile I earn interests:
    REAL money you canspend.

    Maybe the bond matures before any other panic happens, so I get face value back.
    #10     Dec 23, 2009