Too late to jump?

SallyG

http://www.ftadviser.com/2015/06/22/investments/fixed-income/bond-funds-may-face-huge-losses-amid-liquidity-crisis-EKEw2Nou2tRttoFuwcnXgP/article-1.html

" “outflows seem to be starting”, which could turn managers into “a collective of forced sellers”, which has not been seen since the financial crisis."

and if you could - where would you jump to?

Reaper

It is something I am aware of and have been watching. However I only have 1 small bond fund, the rest of my fixed rate investments are direct and I am not particularly concerned about.

If you have a lot of money in funds that invest in fixed interest securities I would be nervous. A crisis is by no means inevitable but it might be an idea to limit your exposure.

EDIT: Incidentally a crisis might be a buying opportunity if bond funds are forced to sell at any price. The underlying securities might be bargains. We will have to wait and see.

dunstonh

" “outflows seem to be starting”, which could turn managers into “a collective of forced sellers”, which has not been seen since the financial crisis."

The problem with quotes that say "...since the financial crisis" is that they sound worse than they actually are. The period since the financial crisis has had very few negative periods and nothing significant. So, even a typical market crash or even a typical correction would be the most since the financial crisis.

You could also read that quote as saying it could be bad but not as bad as the financial crisis as the quote would have said worse than the financial crisis.

kidmugsy

I sold my only bond fund last month. The money is sitting in cash, awaiting events.

jamesd

The quote is referring specifically to bond funds, not equities and other things.

For a while now I've been suggesting commercial property (now not such a good deal but still not bad), P2P and secured VCT as alternatives that are likely not to be highly correlated with bond market moves.