Subscribers thank you for requesting this topic. I really enjoyed putting this together for you guys. When investing in bonds remember there are four primary types of risks: 1. Credit risk 2. Interest rate risk 3. Inflation risk 4. Market risk. Hope you all found this helpful. Bonds are a simple and easy way to balance your portfolio risk with stocks and earn a steady stream of fixed income, however, just like a stock bond values can appreciate or decline with market movements.
Video Outline and Time Stamps so you can quickly jump to any topic: • Vanguard Extended Duration Treasury ETF (EDV) - 1:22 • Vanguard Long-Term Bond Fund ETF (BLV) - 5:25 • Vanguard Long-Term Corporate Bond Fund ETF (VCLT) - 7:34 • Vanguard Tax Exempt Bond Fund ETF (VTEB) - 9:05 • Vanguard bond fund etf comparison - 11:38 • Bond Fund Pros and Cons (Bond Risks, etc) - 12:10
If you are using bonds as a means of diversification, just get treasuries. Don't bother with corporate bonds. Corporate bonds tend to follow the stock market in the long run and will get hammered in a financial crisis due to credit risk. The extra yield isn't worth the amount you will lose in a market crash. It also doesn't help that Corp bond coupons are taxed more than treasuries and many corporate bonds have early redemption clauses which prevent you from making the full profit.
Nice Video! Forgive me for butting in, I would love your initial thoughts. Have you tried - Rozardner Mind Tricks Reality (search on google)? It is an awesome one off guide for revealing the trick to get the mind of a millionaire minus the headache. Ive heard some extraordinary things about it and my BF after many years got cool success with it.
Definitely a great video for people interested in ETF investing. I myself don't invest in ETF's no more, but I do advise a lot of my clients to do so, as they often are looking for less risk and more diversification with (often) not so much money. You did give me great ideas tho, so thanks!
Hi Baby thanks for stopping by. I primarily invest in stocks myself, because of the higher yield, etc, but I think for the average person who wants to invest, but prefers minimal involvement and research than etfs are a great way to go. Glad this helped sir :)
Thank you for noticing, means a lot to me! Since I'm just starting out my business I'm not all that confident about the name and what not so any support helps!
I love the 007 reference at the beginning of your video. :) Thank you for the information as I am trying to pick some funds to mitigate market risk. I have not considered long treasuries until today.
Hows it going David. Thanks for reaching out. Although I do not have a video yet on "intermediate bond funds" I do have a video on Short-term Bond funds. You can watch it here: ruclips.net/video/Ipb9AUOlHwk/видео.html The next bond video I put together will be a review of the intermediate bond funds, and how they function.
@@MoneyandLifeTV Say you are 43 and you just inherited 200K that you are trying to invest in some low risk bond or index fund/etf. What would you do money man.
Thanks Merry :) Investing can be intimidating when you first start, but it gets easier and easier like most things. I remember being sick to my stomach when I first started investing real money, but it got easier and easier. I just kept learning a little bit at a time, and still try to learn more about investing each month. I still have a lot to learn when it comes to bonds. I'm much more comfortable with stocks, and etfs, but putting this video together helped. Thanks for watching Merry :)
@@MoneyandLifeTV That sick to your stomach comment is how I feel right now. Lol. Thank you for the video. I just opened a roth and brokerage for myself and 2 custodial accts for my kids and now I am confused on what etf's and index funds to add to my kids accounts and my two accounts. I think vti, vym, voo, bnd, vnq for my kids and both my accounts but I'm sure that might not be wise but my brain is on overload from all the youtube videos lol. But I have to keep going to at least have my boys 2yo & 4yo financially FREED God willing!
If you go with a 20 yr plus, long term bond fund like VWESX (then to VWETX eventually for lower expense ratio) and stick some of that in your retirement account, where you don't plan on any withdraws for over 20 yrs, then you really don't care about fluctuations in the bond funds worth itself anyway right, since those high yields, re-invested and compounding are making you so much money anyway, correct? This is where the long term bond shines, yes? I mean in 20 years and then for hopefully 20 or more in retirement, who's going to know where the actual bond fund price is, but in this case it's never really going to matter anyway correct?
Hi Q-bert that is correct :) Eventually your passive income will be so large it will no longer matter what the value is. I won't say it doesn't matter, but when you have passive income of thousands per month who really cares at that point?
@@MoneyandLifeTV Nice!! Congrats!! The S&P500 was up 400% since its 2009 lows. 10 year bull market. Unemployment rate was at an all time low, and that is how bull markets come to an end. Buying long term treasury bond ETFs at all time low unemployment is for sure a great hedging strategy. It will never fail.👍👍
Hey Mike, I currently have about 20% AA to BND and VCSH. I'm thinking about selling my VCSH and putting it into EDV, because it tends to move the opposite direction of stocks when the market crashes. I basically want to use it as a hedge to try and time the market next time it crashes, but also have half my bond money safe in BND. You think this would be a good idea?
@@MoneyandLifeTV interesting. Also ironic, all these years being told bond are a safe harbor, but they dip just like stocks. At least the one's i looked at in 5 minutes
Same here, The best long-term (Safest bond fund) I know of that Vanguard offers is EDV. I'm up 15% - 30% this year on that particular bond fund. I found it to be even safer than some of their short-term bond funds. I still have lots to learn about bond funds. What I don't fully understand is the long-term effect of corporate bond purchases by the Fed. I wish I could understand that part more. I want to get a better sense of their movement patterns in volatile markets.
I enjoy your videos, keep up the good work! FINRA has given guidance on disclaimers such that they should not be hidden in drop-down menus. You should put the disclaimer at the top or have it on screen at the beginning of your video. A beta greater than 1 implies a higher volatility than the market. A negative beta implies an inverse relationship. You should be careful not to stray into direct investment advising that is not incidental to your work in accounting unless you have a series 65 (in the US), especially because you are discussing specific products here.
Nice RB! I don't own a lot of bond funds, but the ones I do own have been nice. Plus its nice to see a few things still "Green" in my account whenever the market is burning down 🤑
Hi Nathan, I agree, I don't see interest rates rising anytime soon. I hope they do, but the fed is designed to prevent deflation. They wiill need to raise it some or i think they will have much larger issues.
Hey Mike, Thanks for your wonderful effort. Today is 12/10/19. I want to purchase BLV to hedge so called recession crash. But now the price is pretty top area compare to one year ago. Is it still ok to buy, or little bit wait till next year.. You think BLV price can be lower ? If Fed is lowering interest rates, this BLV price wuill be more up ? Please let me know your opinion. Thanks in advance.
Hi Tyson, great question. Long-term Treasury bonds are generally less volatile than stocks, but they are higher risk due to being more prone to interest rate fluctuations. Short-term bonds are less volatile to interest rate fluctuations. Long-term bonds generally pay the highest yields though.
@@MoneyandLifeTV Oh! I have just started to look at edv and at $142.00 today and in this older vlog I think u showed the price per share at a way way lower number ...so nice increase ...congratulations on a good pick
Was just here wondering as we currently have available bond ETFs that are actually accumulated. Face value returns aren't the main goal here so would them be of any worth? Example would be: iShares USD Treasury Bond 1-3yr UCITS ETF (Acc) - ticker IBTA. What do you think?
Hi Helmer, I tried looking up IBTA, but I was unable to gather further info. What are you hoping to accomplish by investing in the 1 - 3 years treasuries?
@@MoneyandLifeTV Hello! Thanks for coming back on this. Really nice tips and materials btw! So basically me and my friends have been looking for conservative options that would give back fixed income along the way but wouldn't require the dividends to be deposited and taxed, since they would probably be reinvested anyways. Would like to know everybody's thoughts some gov bond etfs that are accumulating instead of distributing. Here's the one i'm talking about as an example: www.justetf.com/uk/etf-profile.html?query=IE00BYXPSP02&groupField=index&from=search&isin=IE00BYXPSP02 Thanks once again and keep up the work. It's been really helpful.
This is very interesting thank you for sharing this. Accumulating funds are certainly not my area of expertise. I think the biggest draw back is the fund is fully exposed to fluctuation in bond prices vs if you had a distributing bond fund you could take some of the cash received from the bonds and use it to buy equities or something else. If the accumulating fund started falling in value than that would be a true shame. Certainly something to consider. From my research it sounds like accumulating funds are taxable in some countries, but not in others. Not sure which country you reside in, but nonetheless there is an interesting forum re: accumulation funds in general that you might find helpful: www.bogleheads.org/forum/viewtopic.php?t=219017 Not sure if you are eligible for a Roth IRA, but if you are, regardless of what you invest in, the income will be tax exempt. I need to read on these things more. Once again thanks for the question. You have peaked my interest about these bonds.
Hi Acranox great question: They related, but are two different things. An accountant is the title of the profession. Accounting is the type of work performed by an accountant. Think an attorney for example. An attorney is the position title, and they practice law similar to an accountant who practices accounting. Hope that helps :)
Hi Ryan, good question. As far as the ETFs are concerned I do not believe they have an option to automatically reinvest the interest/dividends but I could be wrong. Usually these bond funds pay dividends out to you quarterly, but from my own experience I have not seen an option to automatically reinvest it. Perhaps that option is possible with their mutual funds. Hope that helps. Thanks for watching :)
So good stuff. Hey man could you do an update with the new volatility for which funds to buy because it seems like if interst rates go up these ETFs could DROP hard. Also do you have any MACRO long term portfolio make up videos? Like how you Allocate funds?
We Buy real Estate hows it goin! Love the user name. You are spot on with your analysis re: the rising rate impact on bonds. This weekend I will have a video coming out on their short-term bond funds. In this rising rate environment short-term bonds hold their value much better than the long-term and intermediate bonds I don't have a video that demonstrates how to build a long-term portfolio, but this would be a great topic. I will put it on the request list. Thanks for watching and for commenting.
Thank you so much for this viedo , I would like to ask you what is your thoughts on Russias government bond denominated in USD would you consider this a safe bond? Its rating in BBB- . Thanks again.
Thanks again for another great video explaining about bonds. I very interested in what would you do, if you received a lump sum of money . I'm 60 years old and I would love to invest in stocks where's not a real high risk. I would like to preserve what I have and not so much into growth stocks.
Hey Freddie thanks for stopping by as always. I understand the concern for preserving capital especially in this market with the threat of rising interest rates. There is no perfect strategy, because no one knows exactly what the market is going to do in the next few years considering we have been in a bull market for 10 years now: - In terms of stocks I would seek out dividend aristocrats that have been around for 20 years and still have solid financials at this point time. We have seen the downfall of IBM, and GE so it is important to be selective about which companies pay dividends and are still healthy by looking at their financials. - Stocks that will go down in a bear market, but are more defensive in nature are typically utility company stocks and consumer staples. Things people have to purchase in any income to maintain a basic standard of living. - Hedging your risk you might look at bond etfs and adding an inverse etf or two incase the market goes down. - Allocation you might look at 60% stocks/40% bonds or other investments or 70/30 or even 50/50 it all depends on what you are comfortable with. Bonds can go down in value as well. - In terms of investment time horizon if you are looking to invest for 10 years or more you should be ok in most circumstances even if the market decides to take a plunge. - I would hold about 10 % - 20% in cash - I would not put more than 10% of my total capital in any single investment. Those are some basic guidelines that I would suggest. Maybe check with a financial planner too and see what they would recommend. I will be doing more individual company reviews in the future like the one I did for American Water Works so stay tuned :)
Great video! Is there a video that breaks down the difference between regular bonds vs etf bonds. Regular bonds vs index fund bonds? Can you buy or sale etf whenever you want or must you wait to the maturity date?
Hi Tbnewhomes, fantastic question. I'm certainly not a bond expert when it comes to knowing all the rules on bonds. I still have a lot of knowledge to learn in this particular area, however, etf bonds trade just like any normal stock. I like investing in bonds through etfs, because I can trade out of them anytime I need to. You can buy and sell these etfs anytime. With a normal bond I believe you would have to hold until maturity (as far as I understand) to recoup all of your principle, but I could be wrong about that. Thanks for watching. You have me curious now so I'm probably going to be researching this question more in the near future. I've had several people ask for a Vanguard video on short-term bonds and interest rates so look for that potentially before end of year or beg of next year.
Thanks Man! So you can have the safety of the bond but not have your money tied up until the maturity date? With a bond ETF giving that you can trade in and out whenever are you still able to reap the benefits on the dividend yield? Sorry for the all the questions. Thanks for helping us understand this complex financial world lol
No problem, happy to answer your questions whenever I can. With the etf you do still get the yield benefits similar to owning a bond. Instead of an interest payment though it comes in the form of a dividend payment. I think one of the biggest differences between owning an etf vs an actual bond is probably volatility. The bond etf has the volatility similar to a stock. The good news is the etf is made up of hundreds of bonds so at least you are more diversified vs owning a single bond. I think this would make a good future video topic so i'm going to put this on my list.
Hi Scott, usually the biggest swings in bid/ask occur during the evenings once market is closed. The etf can "gap up" or "gap down". For individual stocks it is often before earnings are released when the biggest moves occur. It is not as easy to see with etfs, but I would suggest studying the charts and market movements of the etfs you are considering investing in to best time your entry point.
Hey Mike, great video as always mate, thanks bru. Btw do you have a video tutorial on how someone can go about buying stocks and bonds?? If, not I'd like to see one... Also, do you have anything on the topic of Options??
MrJules thanks for the suggestions brother. I currently do not have a video about how one can purchase stocks and bonds, but possibly in the future I can do a tutorial on how to purchase stocks from Ameritrade which is the platform I use. As far as options go those are highly advanced and currently above my knowledge skill set. There are quite a few channels that cover options on RUclips if you can find the right ones. Ryan Scriber covers option basics in this video: ruclips.net/video/jqmTALgobsU/видео.html. Options Alpha channel covers strictly options I believe: You can find channel link here:ruclips.net/user/bullzandbearz
Good morning Sammy, great question. For bond's and rising rates your best bet will be short-term bonds. I produced a video on Vanguard's short-term bonds you can find it here: ruclips.net/video/Ipb9AUOlHwk/видео.html Short-term bonds are least affected by interest rate hikes. Hope that helps :)
@@MoneyandLifeTV I need your advice. I need to generate more monthly income. How could I do this without loosing too much capital? I thought about investing in O (The monthly dividend). Also I thought about the Bond that is not taxable. I am just not sure it's safe. What do you recommend? Regards
Hi Simon, I think the key to getting passive income in the stock market safely is through diversification. Every investment has at least some risk associated with it even bonds, but if you are well diversified and have money coming form many different investments I think your overall wealth will be more secure. I own close to 40 different investments at he moment. My rule of thumb is to generally not have more than 7.5% in any one investment in my portfolio, however eventually I would like that number to be closer to 1 - 5%. You will want income from different asset classes and different industries to keep it more secure. Nonetheless, you will not be able to avoid market risk which is essentially the stock market as a whole. This is why experts say you should have some money invested in real estate, business or other assets outside the stock market. Hope that helps.
Hi Simon, I don't give out my direct list of investments because what may be good for me might not be good for you depending on what you are trying to accomplish. If you watch many of my videos you will hear me mentioning some of the investments I own. I will provide some examples for you nonetheless. Apple, Microsoft, Proctor and Gamble, Johnson and Johnson, AT&T, Verizon, Pepsi, Coke, EPR, American Waterworks, Amazon, , Colrox, Mcdonaldsetc. Blue chip stocks in general, Reits, and Utility companies have worked out pretty well for me.
@@MoneyandLifeTV thanks Mike for the awesome advice in your channel by the way. my father and I have been getting a lot of value out of what you say. our goal is to upgrade out of this scv and be battlecruisers one day, and you are helping us build that dream! how did you learn how to have a successful youtube channel by the way? thanks again
Haha, thanks Jon. Love your comment about being a Battle Crusier. Hopefully I can be a Dragoon someday :). I learned how to do RUclips by spending 3 months studying youtube before starting. What equipment to buy, editing software, what apps to use......all that fun stuff. All for free on RUclips. I still consider my channel to be fairly small, but blessed to have all the support. Lot of it is just being consistent, and creating content that people really care to watch.
Hi Break from the Heard. Very true. I find that Long-term bond funds generally take the largest hit in a rising interest rate environment. I find that the shorter maturity yield of the bond the less it is impacted by rising rates. Rising rates hasn't been a problem for quite some time. Thanks for commenting and for watching.
Subscribers thank you for requesting this topic. I really enjoyed putting this together for you guys. When investing in bonds remember there are four primary types of risks:
1. Credit risk
2. Interest rate risk
3. Inflation risk
4. Market risk.
Hope you all found this helpful. Bonds are a simple and easy way to balance your portfolio risk with stocks and earn a steady stream of fixed income, however, just like a stock bond values can appreciate or decline with market movements.
Video Outline and Time Stamps so you can quickly jump to any topic:
• Vanguard Extended Duration Treasury ETF (EDV) - 1:22
• Vanguard Long-Term Bond Fund ETF (BLV) - 5:25
• Vanguard Long-Term Corporate Bond Fund ETF (VCLT) - 7:34
• Vanguard Tax Exempt Bond Fund ETF (VTEB) - 9:05
• Vanguard bond fund etf comparison - 11:38
• Bond Fund Pros and Cons (Bond Risks, etc) - 12:10
any suggestion bond etf on Fidelity?
If you are using bonds as a means of diversification, just get treasuries. Don't bother with corporate bonds.
Corporate bonds tend to follow the stock market in the long run and will get hammered in a financial crisis due to credit risk. The extra yield isn't worth the amount you will lose in a market crash. It also doesn't help that Corp bond coupons are taxed more than treasuries and many corporate bonds have early redemption clauses which prevent you from making the full profit.
Great points Michael! Thanks for commenting sir.
Nice Video! Forgive me for butting in, I would love your initial thoughts. Have you tried - Rozardner Mind Tricks Reality (search on google)? It is an awesome one off guide for revealing the trick to get the mind of a millionaire minus the headache. Ive heard some extraordinary things about it and my BF after many years got cool success with it.
Are you talking direct Treasuries or treasury ETFs?
**After learning about these Vanguard Long-Term Bond funds which Vanguard Bond fund ETF would you be most interested in investing in?**
I am looking for a fixed bond sheet I have a buyer with deep pockets
Definitely a great video for people interested in ETF investing.
I myself don't invest in ETF's no more, but I do advise a lot of my clients to do so, as they often are looking for less risk and more diversification with (often) not so much money.
You did give me great ideas tho, so thanks!
Hi Baby thanks for stopping by. I primarily invest in stocks myself, because of the higher yield, etc, but I think for the average person who wants to invest, but prefers minimal involvement and research than etfs are a great way to go. Glad this helped sir :)
By the way I love the acronym of your channel. It is fantastic :)
Thank you for noticing, means a lot to me! Since I'm just starting out my business I'm not all that confident about the name and what not so any support helps!
I love the 007 reference at the beginning of your video. :) Thank you for the information as I am trying to pick some funds to mitigate market risk. I have not considered long treasuries until today.
Excellent I hold VCLT excellent fund some slight growth in the Long Term 7 Percent in 5 Years is not bad
Did I miss something? Did you present the cost of buying and holding these bonds? For example, expense ratio.
VWAHX is another really good one for the high yield bond fund. This one is more for the rich though with a high tax bracket.
I would like to know more about the intermediate and short term bond funds from Vanguard.
Hows it going David. Thanks for reaching out. Although I do not have a video yet on "intermediate bond funds" I do have a video on Short-term Bond funds. You can watch it here: ruclips.net/video/Ipb9AUOlHwk/видео.html The next bond video I put together will be a review of the intermediate bond funds, and how they function.
Money man can you do another updated video on vanguard bonds pleaseee
Thanks for the suggestion what type of bonds fund are you interested in?
@@MoneyandLifeTV Say you are 43 and you just inherited 200K that you are trying to invest in some low risk bond or index fund/etf. What would you do money man.
Great video! I've always been a bit intimidated by ETF investing so this was very informative. Thanks for sharing!
Thanks Merry :) Investing can be intimidating when you first start, but it gets easier and easier like most things. I remember being sick to my stomach when I first started investing real money, but it got easier and easier. I just kept learning a little bit at a time, and still try to learn more about investing each month. I still have a lot to learn when it comes to bonds. I'm much more comfortable with stocks, and etfs, but putting this video together helped. Thanks for watching Merry :)
@@MoneyandLifeTV That sick to your stomach comment is how I feel right now. Lol. Thank you for the video. I just opened a roth and brokerage for myself and 2 custodial accts for my kids and now I am confused on what etf's and index funds to add to my kids accounts and my two accounts. I think vti, vym, voo, bnd, vnq for my kids and both my accounts but I'm sure that might not be wise but my brain is on overload from all the youtube videos lol. But I have to keep going to at least have my boys 2yo & 4yo financially FREED God willing!
If you go with a 20 yr plus, long term bond fund like VWESX (then to VWETX eventually for lower expense ratio) and stick some of that in your retirement account, where you don't plan on any withdraws for over 20 yrs, then you really don't care about fluctuations in the bond funds worth itself anyway right, since those high yields, re-invested and compounding are making you so much money anyway, correct? This is where the long term bond shines, yes?
I mean in 20 years and then for hopefully 20 or more in retirement, who's going to know where the actual bond fund price is, but in this case it's never really going to matter anyway correct?
Hi Q-bert that is correct :) Eventually your passive income will be so large it will no longer matter what the value is. I won't say it doesn't matter, but when you have passive income of thousands per month who really cares at that point?
@@MoneyandLifeTV Cool. Thanks man!
Anytime boss :)
EDV has outperformed the stock market. Lowering rates equals higher price. Hopefully you still own it?? Inverse relationship between price and rates.
Hi Rob, I do still own EDV and love it as a hedge :)
@@MoneyandLifeTV Nice!! Congrats!! The S&P500 was up 400% since its 2009 lows. 10 year bull market. Unemployment rate was at an all time low, and that is how bull markets come to an end. Buying long term treasury bond ETFs at all time low unemployment is for sure a great hedging strategy. It will never fail.👍👍
Blue line is not total return just price. It’s better to chart total return.
Hey Mike, I currently have about 20% AA to BND and VCSH. I'm thinking about selling my VCSH and putting it into EDV, because it tends to move the opposite direction of stocks when the market crashes. I basically want to use it as a hedge to try and time the market next time it crashes, but also have half my bond money safe in BND. You think this would be a good idea?
I’ve put half my savings in a VAGP etf, it is one of vanguard new bond etfs.
It's not a bad time to be in bonds :) Market is all over the place recently.
VCLT dipped in march along with stocks......pft.
Corporate bonds are very dangerous right now at least in my opinion. However, the fed is buying them up.
@@MoneyandLifeTV interesting. Also ironic, all these years being told bond are a safe harbor, but they dip just like stocks. At least the one's i looked at in 5 minutes
Same here, The best long-term (Safest bond fund) I know of that Vanguard offers is EDV. I'm up 15% - 30% this year on that particular bond fund. I found it to be even safer than some of their short-term bond funds. I still have lots to learn about bond funds. What I don't fully understand is the long-term effect of corporate bond purchases by the Fed. I wish I could understand that part more. I want to get a better sense of their movement patterns in volatile markets.
@@MoneyandLifeTV thank you, Sir. love it.
Why not mention Intermediate-Term bonds?
I enjoy your videos, keep up the good work!
FINRA has given guidance on disclaimers such that they should not be hidden in drop-down menus. You should put the disclaimer at the top or have it on screen at the beginning of your video.
A beta greater than 1 implies a higher volatility than the market. A negative beta implies an inverse relationship. You should be careful not to stray into direct investment advising that is not incidental to your work in accounting unless you have a series 65 (in the US), especially because you are discussing specific products here.
Thanks for looking out for me Thomas. It is a good reminder for me to put disclaimers in the videos. Sometimes I forget to do so.
I just added a Bond Index Fund to my portfolio for added diversity and income purposes only.😊
Nice RB! I don't own a lot of bond funds, but the ones I do own have been nice. Plus its nice to see a few things still "Green" in my account whenever the market is burning down 🤑
keep up the good work
Thanks Cole!
Thanks for the video. I guess since the coronavirus incident, interest rates by remain low for at least 1 year to 2 years.
Hi Nathan, I agree, I don't see interest rates rising anytime soon. I hope they do, but the fed is designed to prevent deflation. They wiill need to raise it some or i think they will have much larger issues.
Hey Mike, Thanks for your wonderful effort. Today is 12/10/19. I want to purchase BLV to hedge so called recession crash. But now the price is pretty top area compare to one year ago. Is it still ok to buy, or little bit wait till next year.. You think BLV price can be lower ? If Fed is lowering interest rates, this BLV price wuill be more up ?
Please let me know your opinion. Thanks in advance.
Thanks. Informative and entertaining.
Hey Mike, why is EDV considered high risk 5? I thought treasury bonds were the safest?
Hi Tyson, great question. Long-term Treasury bonds are generally less volatile than stocks, but they are higher risk due to being more prone to interest rate fluctuations. Short-term bonds are less volatile to interest rate fluctuations. Long-term bonds generally pay the highest yields though.
@@MoneyandLifeTV thanks Mike!
Great ..thank u..your edv. ... doing fantastic
My EDV is doing great Cinque, how did you know? :) Thanks for commenting.
@@MoneyandLifeTV Oh! I have just started to look at edv and at $142.00 today and in this older vlog I think u showed the price per share at a way way lower number ...so nice increase ...congratulations on a good pick
Thanks! It's price fluctuates like anything else but the closer we get to a recession the more it seems to increase in value.
Was just here wondering as we currently have available bond ETFs that are actually accumulated. Face value returns aren't the main goal here so would them be of any worth? Example would be: iShares USD Treasury Bond 1-3yr UCITS ETF (Acc) - ticker IBTA. What do you think?
Hi Helmer, I tried looking up IBTA, but I was unable to gather further info. What are you hoping to accomplish by investing in the 1 - 3 years treasuries?
@@MoneyandLifeTV Hello! Thanks for coming back on this. Really nice tips and materials btw! So basically me and my friends have been looking for conservative options that would give back fixed income along the way but wouldn't require the dividends to be deposited and taxed, since they would probably be reinvested anyways. Would like to know everybody's thoughts some gov bond etfs that are accumulating instead of distributing. Here's the one i'm talking about as an example: www.justetf.com/uk/etf-profile.html?query=IE00BYXPSP02&groupField=index&from=search&isin=IE00BYXPSP02
Thanks once again and keep up the work. It's been really helpful.
This is very interesting thank you for sharing this. Accumulating funds are certainly not my area of expertise. I think the biggest draw back is the fund is fully exposed to fluctuation in bond prices vs if you had a distributing bond fund you could take some of the cash received from the bonds and use it to buy equities or something else. If the accumulating fund started falling in value than that would be a true shame. Certainly something to consider.
From my research it sounds like accumulating funds are taxable in some countries, but not in others. Not sure which country you reside in, but nonetheless there is an interesting forum re: accumulation funds in general that you might find helpful: www.bogleheads.org/forum/viewtopic.php?t=219017
Not sure if you are eligible for a Roth IRA, but if you are, regardless of what you invest in, the income will be tax exempt. I need to read on these things more. Once again thanks for the question. You have peaked my interest about these bonds.
@@MoneyandLifeTV Sure thing! Give a shout if eventually you put up a video about those. Thanks once again for the content, was very helpful.
I have a question is accountant and accounting the same thing?
Hi Acranox great question: They related, but are two different things. An accountant is the title of the profession. Accounting is the type of work performed by an accountant. Think an attorney for example. An attorney is the position title, and they practice law similar to an accountant who practices accounting. Hope that helps :)
So basically if you're doing an accounting job, you will be called an accountant right?
Do these funds take the earned income and reinvest automatically? Or does vanguard have the option for that
Hi Ryan, good question. As far as the ETFs are concerned I do not believe they have an option to automatically reinvest the interest/dividends but I could be wrong. Usually these bond funds pay dividends out to you quarterly, but from my own experience I have not seen an option to automatically reinvest it. Perhaps that option is possible with their mutual funds. Hope that helps. Thanks for watching :)
So good stuff. Hey man could you do an update with the new volatility for which funds to buy because it seems like if interst rates go up these ETFs could DROP hard. Also do you have any MACRO long term portfolio make up videos? Like how you Allocate funds?
We Buy real Estate hows it goin! Love the user name. You are spot on with your analysis re: the rising rate impact on bonds. This weekend I will have a video coming out on their short-term bond funds. In this rising rate environment short-term bonds hold their value much better than the long-term and intermediate bonds
I don't have a video that demonstrates how to build a long-term portfolio, but this would be a great topic. I will put it on the request list.
Thanks for watching and for commenting.
Money and Life TV f gcvffchggbhfggggvggfvcghnbujydbjjjj
Thank you so much for this viedo , I would like to ask you what is your thoughts on Russias government bond denominated in USD would you consider this a safe bond? Its rating in BBB- . Thanks again.
Thanks for the clear info, much appreciated
Thanks Chris!
Thanks again for another great video explaining about bonds. I very interested in what would you do, if you received a lump sum of money . I'm 60 years old and I would love to invest in stocks where's not a real high risk. I would like to preserve what I have and not so much into growth stocks.
Hey Freddie thanks for stopping by as always. I understand the concern for preserving capital especially in this market with the threat of rising interest rates. There is no perfect strategy, because no one knows exactly what the market is going to do in the next few years considering we have been in a bull market for 10 years now:
- In terms of stocks I would seek out dividend aristocrats that have been around for 20 years and still have solid financials at this point time. We have seen the downfall of IBM, and GE so it is important to be selective about which companies pay dividends and are still healthy by looking at their financials.
- Stocks that will go down in a bear market, but are more defensive in nature are typically utility company stocks and consumer staples. Things people have to purchase in any income to maintain a basic standard of living.
- Hedging your risk you might look at bond etfs and adding an inverse etf or two incase the market goes down.
- Allocation you might look at 60% stocks/40% bonds or other investments or 70/30 or even 50/50 it all depends on what you are comfortable with. Bonds can go down in value as well.
- In terms of investment time horizon if you are looking to invest for 10 years or more you should be ok in most circumstances even if the market decides to take a plunge.
- I would hold about 10 % - 20% in cash
- I would not put more than 10% of my total capital in any single investment.
Those are some basic guidelines that I would suggest. Maybe check with a financial planner too and see what they would recommend. I will be doing more individual company reviews in the future like the one I did for American Water Works so stay tuned :)
Great video! Is there a video that breaks down the difference between regular bonds vs etf bonds. Regular bonds vs index fund bonds? Can you buy or sale etf whenever you want or must you wait to the maturity date?
Hi Tbnewhomes, fantastic question. I'm certainly not a bond expert when it comes to knowing all the rules on bonds. I still have a lot of knowledge to learn in this particular area, however, etf bonds trade just like any normal stock. I like investing in bonds through etfs, because I can trade out of them anytime I need to. You can buy and sell these etfs anytime. With a normal bond I believe you would have to hold until maturity (as far as I understand) to recoup all of your principle, but I could be wrong about that. Thanks for watching. You have me curious now so I'm probably going to be researching this question more in the near future. I've had several people ask for a Vanguard video on short-term bonds and interest rates so look for that potentially before end of year or beg of next year.
Thanks Man! So you can have the safety of the bond but not have your money tied up until the maturity date? With a bond ETF giving that you can trade in and out whenever are you still able to reap the benefits on the dividend yield? Sorry for the all the questions. Thanks for helping us understand this complex financial world lol
No problem, happy to answer your questions whenever I can. With the etf you do still get the yield benefits similar to owning a bond. Instead of an interest payment though it comes in the form of a dividend payment. I think one of the biggest differences between owning an etf vs an actual bond is probably volatility. The bond etf has the volatility similar to a stock. The good news is the etf is made up of hundreds of bonds so at least you are more diversified vs owning a single bond. I think this would make a good future video topic so i'm going to put this on my list.
Thanks!! I understand
How often do bid /ask spreads get out of whack on these ETF's to the point you can take advantage of it as an investor?
Hi Scott, usually the biggest swings in bid/ask occur during the evenings once market is closed. The etf can "gap up" or "gap down".
For individual stocks it is often before earnings are released when the biggest moves occur. It is not as easy to see with etfs, but I would suggest studying the charts and market movements of the etfs you are considering investing in to best time your entry point.
Hey Mike, great video as always mate, thanks bru.
Btw do you have a video tutorial on how someone can go about buying stocks and bonds?? If, not I'd like to see one...
Also, do you have anything on the topic of Options??
MrJules thanks for the suggestions brother. I currently do not have a video about how one can purchase stocks and bonds, but possibly in the future I can do a tutorial on how to purchase stocks from Ameritrade which is the platform I use.
As far as options go those are highly advanced and currently above my knowledge skill set. There are quite a few channels that cover options on RUclips if you can find the right ones. Ryan Scriber covers option basics in this video: ruclips.net/video/jqmTALgobsU/видео.html.
Options Alpha channel covers strictly options I believe: You can find channel link here:ruclips.net/user/bullzandbearz
Money and Life TV Awesome, Thanks Mike!!
Anytime brother. Thanks for the support.
VTEB is a municipal bond fund. Hmmmm.
Recently they have lost value like other bond funds.
2019 seems good for bonds
Hi Martin, 2019 seems to be all over the place this year so I would agree :) I own both long-term and short-term bonds and glad I own both kinds.
Look at the charts on these now. Not good.
How about the medium bonds, is it affected by the interest rate, like the long term?
Good morning Sammy, great question. For bond's and rising rates your best bet will be short-term bonds. I produced a video on Vanguard's short-term bonds you can find it here: ruclips.net/video/Ipb9AUOlHwk/видео.html Short-term bonds are least affected by interest rate hikes. Hope that helps :)
Good thing I did find this video. Is almost did invest in VCLT.
Thanks for commenting Simon. Glad the video helped provide some clarity to all of this "bond" stuff.
@@MoneyandLifeTV I need your advice. I need to generate more monthly income. How could I do this without loosing too much capital? I thought about investing in O (The monthly dividend). Also I thought about the Bond that is not taxable. I am just not sure it's safe. What do you recommend? Regards
Hi Simon, I think the key to getting passive income in the stock market safely is through diversification. Every investment has at least some risk associated with it even bonds, but if you are well diversified and have money coming form many different investments I think your overall wealth will be more secure. I own close to 40 different investments at he moment. My rule of thumb is to generally not have more than 7.5% in any one investment in my portfolio, however eventually I would like that number to be closer to 1 - 5%. You will want income from different asset classes and different industries to keep it more secure. Nonetheless, you will not be able to avoid market risk which is essentially the stock market as a whole. This is why experts say you should have some money invested in real estate, business or other assets outside the stock market. Hope that helps.
@@MoneyandLifeTV Yes it did helped a lot. You have 40 different investments. Could you tell me which are they?
Hi Simon, I don't give out my direct list of investments because what may be good for me might not be good for you depending on what you are trying to accomplish. If you watch many of my videos you will hear me mentioning some of the investments I own. I will provide some examples for you nonetheless. Apple, Microsoft, Proctor and Gamble, Johnson and Johnson, AT&T, Verizon, Pepsi, Coke, EPR, American Waterworks, Amazon, , Colrox, Mcdonaldsetc. Blue chip stocks in general, Reits, and Utility companies have worked out pretty well for me.
Thanks Mike. You have to admit though, James is the cooler of the bonds. lol
A tip: watch series on flixzone. I've been using them for watching loads of movies these days.
@Jonas Jeffery Yup, I have been watching on flixzone for years myself :D
can you do bond etf n Fidelity please
Hi Robi, thanks for asking I will highly consider it. I think that would be a great topic
@@MoneyandLifeTV thank you. i will wait for that.
No problem i've added it to my list.
Wish you would talk about total bond and short term bonds.
Hi David, I would be more than happy to. Thanks for suggesting the topic. I'll see if I can put something together before the end of the year.
CHIPPER IS AN SCV OMG I KNEW IT
OMG his secret has been revealed! That bird hung around too many SCVs in the day, and picked up the language. Nice catch, most people miss that ;)
@@MoneyandLifeTV thanks Mike for the awesome advice in your channel by the way. my father and I have been getting a lot of value out of what you say. our goal is to upgrade out of this scv and be battlecruisers one day, and you are helping us build that dream! how did you learn how to have a successful youtube channel by the way? thanks again
Haha, thanks Jon. Love your comment about being a Battle Crusier. Hopefully I can be a Dragoon someday :). I learned how to do RUclips by spending 3 months studying youtube before starting. What equipment to buy, editing software, what apps to use......all that fun stuff. All for free on RUclips. I still consider my channel to be fairly small, but blessed to have all the support. Lot of it is just being consistent, and creating content that people really care to watch.
Joking aside. Very informative.
Thanks Chico. I learned a few things myself in the process of making this one :)
A great teacher is always learning!
ooooo that is a good one. I have not heard that said before.
Thanks.
Bond funds are getting killed due to rising interest rates.
Hi Break from the Heard. Very true. I find that Long-term bond funds generally take the largest hit in a rising interest rate environment. I find that the shorter maturity yield of the bond the less it is impacted by rising rates. Rising rates hasn't been a problem for quite some time. Thanks for commenting and for watching.