Money For the Rest of Us
Bond Investing Masterclass Bonus Episode
Aug 30, 2023
This bonus episode is a masterclass on bond investing. They discuss measures of bond yields, estimating returns for bond funds, and a bond type with a U.S. government guarantee. They also explore the challenges of the current rate environment, the relationship between bond prices and yields, and the impact of changing interest rates on bond investments. Additionally, they discuss the role of the Federal Home Loan Banks in the mortgage market and their implied guarantee from the U.S. government.
33:07
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Quick takeaways
- Different bond yield measurements: trailing 12-month yield, yield to maturity, and SEC yield.
- Starting yield to maturity as the best estimate for bond fund or ETF returns.
Deep dives
Different Types of Yield Measurements for Bonds
In this podcast episode, three segments from recent Money for the Rest of Us Plus episodes on bond investing are shared. The first segment discusses the different types of yield measurements for bonds, including the trailing 12-month yield, the yield to maturity, and the SEC yield. The challenges in measuring bond yields in the current rising interest rate environment are also discussed.
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