"This climate offers an “almost generational” opportunity in fixed income, Akullian says. The potential for total return is greater now than it will be as the Fed starts to loosen. Rate cuts will boost bond prices and decrease yields, eating away at future total returns."
So the point is to buy duration. If you don't really need the money intermediate term, then don't buy it - go for the 20, 30, 50, 100 year bonds as these will see the greatest price appreciation when rates go lower. Nothing says you have to hold to maturity. There's nothing wrong with selling bonds when the appreciation is great and the forward yield is low. Profit is profit - sell and move into something better.
I've been like a kid in a candy shop the past couple months. As my maturities, redemptions, and interest payments roll in, I redeploy into new (municipal) bonds. Similar for new investment dollars.
As much as I hate mutual funds, DW's retirement plan basically requires it. We had been socking everything into their money market fund. This year, we began putting 10% into PTTRX. It's been great...though the price has continued lower, yield is now up at 5%. So, we've been accumulating more shares as it goes lower, pick up the great yield, and when rates do come down, it's going to go up about 25% to 30% to where it normally trades under more normal rates.
This is a wonderful time for fixed income investors. Stay the course. Don't get diverted to other things.
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