How to Choose Bond Funds [Why Higher Yield is a Bad Idea] скачать в хорошем качестве

How to Choose Bond Funds [Why Higher Yield is a Bad Idea]

I share how evaluate bond funds, with a detailed comparison of two bond funds. We will discuss why going after higher yields in bonds can be a mistake! The two funds we will use are FXNAX and FTBFX. The concepts apply for comparing any bond index funds (FXNAX vs FTBFX, FXNAX vs VBTLX, VBTLX vs VBILX)! #BondFunds #ChoosingBondFund #FXNAX #FTBFX --- Follow up Videos: Three-Fund Portfolio [The BEST Portfolio!]    • Three-Fund Portfolio [The BEST Portfolio!]   S&P 500 vs Total Stock Market?    • S&P 500 vs Total Stock Market?  [VTI vs VO...   --- Referral Links Get $20 when you try Personal Capital (when linking an investment account): https://pcap.rocks/n55809 Get a $300 bonus, 6% back on groceries, 3% back on gas: http://refer.amex.us/NICHODReH5?xl=cp19 Get a $200 bonus, 5% back on groceries, 3% back on dining: https://www.referyourchasecard.com/18... Get $30 and cash back when shopping online: https://www.rakuten.com/r/ENJAYD2?utm... Great Books for Financial Independence Bogleheads’ Guide to Investing: https://amzn.to/3KOcRB7 Bogleheads’ Guide to the Three-Fund Portfolio: https://amzn.to/33UuBu1 Asset Protection: Concepts and Strategies for Protecting Your Wealth: https://amzn.to/3oarULI Retirement Planning Guidebook: https://amzn.to/3skso3h All About Asset Allocation: https://amzn.to/34gLIG4 Equity Valuation and Analysis: https://amzn.to/3g9LKSM Disclosure: Referral links this are affiliate links. At no additional cost to you, I might earn a commission if you make a purchase. --- Outline 00:00 Intro Investors are often tempted to go after a higher return when selected bond funds. Is this a good idea? This video covers two concepts for bond index fund strategy: 1. How to evaluate bond funds and 2. Why I think going after a higher return is bad. 01:09 Comparing Two Funds: FXNAX & FTBFX I use FXNAX and FTBFX for the comparison. The concepts apply for comparing any bond funds (FXNAX vs FTBFX, FXNAX vs VBTLX, VBTLX vs VBILX)! 02:52 Active vs Passive & Fees FXNAX is a passive index fund and FTBFX is an actively managed fund. This is reflected in the fees, with FTBFX charging 18x in fees. 03:59 Duration I provide an overview of duration, which is a key metric in understanding risk of bond funds. 05:47 Fixed Income Style Map The fixed income style map is very useful for quickly getting an idea of a fund’s composition. I discuss how to interpret the style map, which has two dimensions: interest rate sensitivity and credit quality. I compare the style maps of the two funds. 07:37 Credit Quality I compare the credit quality of the two funds. 08:20 Diversification I discuss and compare different aspects of diversification: portfolio, asset class, and regional diversification. 09:49 Risk & Volatility Measures I discuss the high-level difference in risk characteristics then look at the standard deviation and sharpe ratios. 11:14 Higher Bond Returns? I address the question “Should you seek higher yields from bonds?” I detail why I think it’s a bad idea. 12:20 Getting a Better Return - Two Portfolios I walk through two portfolios to illustrate why seeking a higher return via bonds is a bad idea. We can see bonds are likely the wrong tool for improving portfolio returns. Stocks are a far more efficient tool for increasing risk adjusted returns in a portfolio. 14:54 My Thoughts I share why FXNAX is the only bond fund in my portfolio. I discuss another bond strategy which uses only treasuries. --- Disclaimer: I am not a financial advisor. My videos are for educational purposes and are my opinions. You should seek advice from a professional advisor or perform your own research. There is no guarantee you will be successful following my opinions.