what does "Bond Market crash" mean to F fund?

[dpmp]

The buzz word lately is the "bond market crash". Then the explanation was that investors would shift to stocks. I'm not sure what is true and what not.

From what I understand, bond crash means yield is higher. Wouldn't that be good for F fund? But if bond crashes, and the explanation is true, then stocks rally. Wouldn't that be good for C, S, I and not as good for F?

I think that I am thoroughly confused about these economists. Not sure how much they know. Which makes me more confused about stocks and bonds.

Anyone care to clear my head?

 

[JTH]

Rising yield prices = declining bond prices. Right now, only the 30 year looks poised for a downturn. More importantly for us, the 10 year yield has plenty of upside potential left in the long-term declining parallel channel. Don't be mislead by the appearance of an inverted relationship between stocks and bonds. In random studies I've done, I've found the S&P 500 and AGG can trade in the same direction 1/3rd of the time. There have been plenty of times over the last year they have traded together. AGG has just finished a slightly rising "M" pattern and my perception is it may follow with an "A" pattern, retracing 50-75% from the previous "M" top. But first we need to get above the 200 EMA which is a huge physiological level. If we can't get above it after 2-3 test, then I'd expect further downside action. Regardless, I don't think the risk/reward ratio warrants being invested in the F-Fund over the safety and surety of the G-Fund.

 

[JTH]

Rising yield prices = declining bond prices. Right now, only the 30 year looks poised for a downturn. More importantly for us, the 10 year yield has plenty of upside potential left in the long-term declining parallel channel. Don't be mislead by the appearance of an inverted relationship between stocks and bonds. In random studies I've done, I've found the S&P 500 and AGG can trade in the same direction 1/3rd of the time. There have been plenty of times over the last year they have traded together. AGG has just finished a slightly rising "M" pattern and my perception is it may follow with an "A" pattern, retracing 50-75% from the previous "M" top. But first we need to get above the 200 EMA which is a huge physiological level. If we can't get above it after 2-3 test, then I'd expect further downside action. Regardless, I don't think the risk/reward ratio warrants being invested in the F-Fund over the safety and surety of the G-Fund.

In reference to the 10 year yield, here is a Quarterly chart going back to 1988 showing the channel we are in.

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