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birb_cromble  1d ago (text post)   418 thread views

Weekly Finance Thread

A weekly thread to discuss financial matters - from personal all the way up to global.

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Can someone help me think about bonds properly? I’ve been buying FTBFX as part of a 20-30-50 portfolio and over the past like 5+ years my return is 0.25% or so—I’d have been better off with just money market. Are my expectations off? I get keeping some ballast for rebalancing but the bonds are just melting away it seems with inflation.

Bonds and bond funds are somewhat different. You're correct the growth is anemic in that share price in the 5 year growth is pretty much dead even, but your holdings are growing through a dividend of approximately 4.5%. This dividend is better than current money market rates which are hovering anywhere from 2-3.5% The bonds in your mutual fund also may have some income tax advantages that money markets do not have, as they are largely US treasuries.

Kahn academy might be a pretty decent overview but I haven't looked at the course myself:

https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/ap-financial-sector/financial-assets-ap/v/introduction-to-bonds

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