I keep hearing people say (not here, elsewhere) that the bond market may not be so good in the foreseeable future, due to the fact that the fed is raising interest rates. I am still a newbie when it comes to these things. Does this mean that bonds may not be as safe as conventional wisdom states to drop an emergency fund into?
-Nope. 3% is a big annual price movement for most bond funds, but a big day for stocks. Bonds are still many times safer than stocks in the short run.
-It shows that bond returns are not correlated with stocks, which is a good sign
-If bond prices fall it means they now have a higher expected return than they did before, shouldn't that be a buying sign?
-The best guess of every bond investor on the planet is the current price, otherwise the price would be different. Are you smarter than every bond investor on the planet?
-When the Fed raised rates this week, rates dropped sharply. The exact opposite of what everyone said. This is because of the point above that the best guess of everyone for every bond is the current price, and the Fed did not indicate rates rising as fast as people had expected. This is convenient, it means that the current market price is a free consultation with all the bond experts on the planet. If you polled all the governments, institutions, hedge funds, and everyone with skin in the game about what they thought the correct price for bonds should be, the average answer would be exactly the current price. So the only thing you need to decide is what amount of bonds you want relative to everything else.
One thing I have yet to figure out is how much work and how much time that would take to set up and maintain.
I began the process once though I didn't hit buy at the end. I think it would take one minute per year per length of ladder. Pretty easy.