vania-janet/multiturn-rag-retrieval-data huggingface dataset:
Investing in individual long-term fixed income instruments now is probably not going to make you much money right now unless you do intend to hold onto the thing and it's low yield for 15 years. The yield is actually not the best out there, see these similar examples: I'm a more aggressive and active investor, so I'd never consider making a 15 year commitment to a low rate like this. If you value stability and safety, and don't care about inflation protection, you may find this an attractive investment. I'm using New York municipal bond funds that I bought a few months back for the stable/safety portion of my portfolio. (I'm a NY resident, so there is a tax benefit)
As others have pointed out your bond funds should have short durations, preferably not more than about 2 years. If you are in a bond fund for the long haul meaning you do not have to draw on your bond fund a short time after interest rates have gone up, it is not a big issue. The fund's holdings will eventually turn over into higher interest bearing paper. If bonds do go down, you might want to add more to the fund(s) (see my comment on age-specific asset allocation below). Keep in mind that some stocks are interest sensitive, for example utility stocks which are used as an income source and their dividends compete with rates on CDs which are much safer. Right now CD rates are very low. This could change. It's possible that we may be in an unusually sensitive interest rate period that might have large effects on the stock market, yet to be determined. The reason is that rates have been so low for such a long time that folks that normally would have obtained income streams from bonds have turned to dividend bearing stocks. Some believe that recent market rises are due to such people seeking dividends to enhance cash inflows. If, and emphasis on if, this is true, we could see a sharp drop in the market as sell offs occur as those who want cash streams move from stocks to ultra safe, government insured CDs. Only time will tell if this is going to play out. If retirement for you is 15+ years in the future and the market goes down (bonds or equities), good stuff - it's a buying opportunity in whatever category has dropped. Most important is to keep an eye on your asset allocation and make sure it is appropriate to your age. You did not state the percentages in each category, so further discussion is impossible on that topic. With more than 15 years to go, I personally would be heavily weighted on the equity side, mostly mid-cap and some small equity funds or ETFs in both domestic and international markets. As you age, shuffle some equities into fixed income (bonds, CDs and the like). Work up an asset allocation plan - start thinking about it now. Don't wait.
Ponder this. Suppose that a reputable company or government were to come out and say hey, we are going to issue some 10 year bonds at 6.4%. Anyone interested in buying some? Assume that the company or government is financially solid and there is zero chance that they will go bankrupt. Think those bonds would sell? Would you be interested in buying such a bond? Well, I would wager that these bonds would sell like hotcakes, despite the fact that the long term stock market return beats it by a half percent. Heck, vanguard's junk bond fund is hot right now. It only yields 4.9% and those are junk bonds, not rock solid companies (see vanguard high yield corporate bond fund) Every time you make an extra principal payment on your student loan, you are effectively purchasing a investment with a rock solid, guaranteed 6.4% return for 10 years (or whatever time you have left on the loan if make no extra payments). On top of that, paying off a loan early builds your credit reputation, improves your monthly cash flow once the loan is paid, may increase your purchasing power for a house or car, and if nothing else, it frees you from being a slave to that debt payment every month.  Edit Improved wording based on Ross's comment
"There may well be several such graphs, I expect googling will turn them up; but the definition of risk is actually quite important here. My definition of risk might not be quite the same as yours, so the relative risk factors would be different. For example: in general, stocks are more risky than bonds.  But owning common shares in a blue-chip company might well be less risky than owning bonds from a company teetering on the edge of bankruptcy, and no single risk number can really capture that. Another example: while I can put all my money in short-term deposits, and it is pretty ""safe"", if it grows at 1% so that my investment portfolio cannot fund my retirement, then I have a risk that I will run out of money before I shuffle off this mortal coil.  How to capture that ""risk"" in a single number? So you will need to better define your parameters before you can prepare a visual aid. Good Luck"
John Bogle never said only buy the S&P 500 or any single index Q:Do you think the average person could safely invest for retirement and   other goals without expert advice -- just by indexing? A: Yes, there is a rule of thumb I add to that. You should start out   heavily invested in equities. Hold some bond index funds as well as   stock index funds. By the time you get closer to retirement or into   your retirement, you should have a significant position in bond index   funds as well as stock index funds. As we get older, we have less time   to recoup. We have more money to protect and our nervousness increases   with age. We get a little bit worried about that nest egg when it's   large and we have little time to recoup it, so we pay too much   attention to the fluctuations in the market, which in the long run   mean nothing. How much to pay Q: What's the highest expense ratio that one should pay for a   domestic equity fund? A: I'd say three-quarters of 1 percent maybe.   Q: For an international fund?  A: I'd say three-quarters of 1 percent.   Q: For a bond fund? A: One-half of 1 percent. But I'd shave that a little bit. For   example, if you can buy a no-load bond fund or a no-load stock fund,   you can afford a little more expense ratio, because you're not paying   any commission. You've eliminated cost No. 2....
I think your question is very difficult to answer because it involves speculation. I think the best article describing why or why not to invest in gold in a recent Motley Fool Article.
"Are there other options I haven't thought of? Mutual funds, stocks, bonds. To buy and sell these you don't need a lawyer, a real-estate broker and a banker. Much more flexible than owning real estate. Edit: Re Option 3: With no knowledge of investing the first thing you should do is read a few books. The second thing you should do is invest in mutual funds (and/or ETFs) that track an index, such as the FTSE graph that was posted. Index funds are the safest way to invest for those with no experience. With the substantial amount that you are considering investing it would also be wise to do it gradually. Look up ""dollar cost averaging."""
"How should I allocate short-term assets in a rising-interest rate   environment? Assuming that the last part is correct, there could be bear bond funds that short bonds that could work well as a way to invest. However, bear in that the the ""rising-interest rate environment"" is part of the basis that may or may not be true in the end as I'm not sure I've seen anything to tell me why rates couldn't stay where they are for another couple of years or more. Long-Term Capital Management would be a cautionary tale before about bonds that had assumptions that backfired when something that wasn't supposed to happen, happened. Thus, while you can say there is ""rising-interest rate environment"" what else are you prepared to assume and how certain are you of that happening? An alternate theory here would be that ""junk bonds"" may do well because the economy has to be heating up for rates to rise and thus the bonds that are priced down so much because of default risk may turn out to not go bust and thus could do well. Course this would carry the ""Your mileage may vary"" and without a working time machine I couldn't say which funds will be good and which would suck. As for what I would do if I was dealing with my own money: Money market funds and CDs would likely be my suggestion for the short-term where I want to prevent principal risk. This is likely what I would do if I believed the rising rate environment is here."
You say you have 90% in stocks. I'll assume that you have the other 10% in bonds. For the sake of simplicity, I'll assume that your investments in stocks are in nice, passive indexed mutual funds and ETFs, rather than in individual stocks. A 90% allocation in stocks is considered aggressive. The problem is that if the stock market crashes, you may lose 40% or more of your investment in a single year. As you point out, you are investing for the long term. That's great, it means you can rest easy if the stock market crashes, safe in the hope that you have many years for it to recover. So long as you have the emotional willpower to stick with it. Would you be better off with a 100% allocation in stocks? You'd think so, wouldn't you. After all, the stock market as a whole gives better expected returns than the bond market. But keep in mind, the stock market and the bond market are (somewhat) negatively correlated. That means when the stock market goes down, the bond market often goes up, and vice versa. Investing some of your money in bonds will slightly reduce your expected return but will also reduce your standard deviation and your maximum annual loss. Canadian Couch Potato has an interesting write-up on how to estimate stock and bond returns. It's based on your stocks being invested equally in the Canadian, U.S., and international markets. As you live in the U.S., that likely doesn't directly apply to you; you probably ignore the Canadian stock market, but your returns will be fairly similar. I've reproduced part of that table here: As you can see, your expected return is highest with a 100% allocation in stocks. With a 20 year window, you likely can recover from any crash. If you have the stomach for it, it's the allocation with the highest expected return. Once you get closer to retirement, though, you have less time to wait for the stock market to recover. If you still have 90% or 100% of your investment in stocks and the market crashes by 44%, it might well take you more than 6 years to recover.
As I'm sure you are reading in Hull's classic, the basic valuation of bonds depends on the chance of entity defaulting on those bonds.  Let's start with just looking at the US.  The United States has a big advantage over corporations in issuing debt as it also prints the same currency that the debt is denominated in.  This makes it much easier not to default on your debt as you can always print more money to pay it.  Printing too much currency would cause inflation lowering the value of debt, but this would also lower the value of US corporate debt as well.  So you can think of even the highest rated corporate bonds as having the same rate as government debt plus a little extra due to the additional default risk of the corporation. The situation with other AA rated governments is more complicated.  Most of those governments have debt denominated in their local currency as well so it may seem like they should all have similar rates.  However, some governments have higher and some actually have lower rates than the United States.  Now, as above, some of the difference is due to the possible need of printing too much currency to cover the debt in crisis and now that we have more than one country to invest in the extra risk of international money flowing out of the country's bonds. However, the bigger difference between AA governments rates depends more on money flow, central banks and regulation.  Bonds are still mostly freely traded instruments that respond to supply and demand, but this supply and demand is heavily influenced by governments.  Central banks buy up large portions of the debt raising demand and lowering rates.  Regulators force banks to hold a certain amount of treasuries perhaps inflating demand. Finally, to answer your question the United States has some interesting advantages partially just due to its long history of stability, controlled inflation and large economy making treasuries valuable as one of the lowest risk investments.  So its rates are generally on the low end, but government manipulation can still mean that it is not necessarily the lowest.
Yes, bond funds are marked to market, so they will decline as the composition of their holdings will. Households actually have unimpressive relative levels of credit to equity holdings.  The reason why is because there is little return on credit, making it irrational to hold any amount greater than to fund future liquidity needs, risk adjusted and time discounted. The vast majority of credit is held by insurance companies.  Pension funds have large stakes as well.  Banks hold even fewer bonds since they try to sell them as soon as they've made them. Insurance companies are forced to hold a large percentage of their floats in credit then preferred equity.  While this dulls their returns, it's not a large problem for them because they typically hold bonds until maturity.  Only the ones who misprice the risk of insurance will have to sell at unfavorable prices. Being able to predict interest rates thus bond prices accurately would make one the best bond manager in the world.  While it does look like inflation will rise again soon just as it has during every other US expansion, can it be assured when commodity prices are high in real terms and look like they may be in a collapse?  The banking industry would have to produce credit at a much higher rate to counter the deflation of all physical goods. Households typically shun assets at low prices to pursue others at high prices, so their holdings of bonds ETFs should be expected to decline during a bond collapse.  If insurance companies find it less costly to hold ETFs then they will contribute to an increase in bond ETF supply.
Can anyone suggest all type of investments in India which are recession proof? There are no such investments. Quite a few think bullions like Gold tend to go up during recession, which is true to an extent; however there are enough articles that show it is not necessarily true. There are no fool proof investments. The only fool proof way is to mitigate risks. Have a diversified portfolio that has Debt [Fixed Deposits, Bonds] and equity [Stocks], Bullion [Gold], etc. And stay invested for long as the effects tend to cancel out in the long run.
Instead you can get the exposure to interest rates by holding a lesser amount in longer-term bonds, rather than more in shorter-term bonds. I don't believe in shifting your weights toward nor away from this type of bond (as opposed to equity) as you age so if you are getting that advice, know that it is not well-founded in theory. Whatever your relative weight in risky bonds when you are young is should also be your weight when you are older. International. There are probably some gains from having some exposure to international markets, although these have decreased over time as economies have become more integrated. If we followed market weights, you would actually put half your equity weight in an international fund. Because international funds are taxed differently (gains are always taxed at the short-term capital gains rate) and because they have higher management fees, most people make only a small investment to international funds, if any at all. Emerging markets International funds often ignore emerging markets in order to maintain liquidity and low fees. You can get some exposure to these markets through emerging markets funds. However, the value of public equity in emerging markets is small when compared with that of developed markets, so according to finance theory, your investment in them should be small as well. That's a theoretical, not an empirical result. Emerging market funds charge high fees as well, so this one is kind of up to your taste. I can't say whether it will work out in the future. Real estate. You may want to get exposure to real estate by buying a real-estate fund (REIT). Though, if you own a house you are already exposed to the real estate market, perhaps more than you want to be. REITs often invest in commercial real estate, which is a little different from the residential market. Small Cap. Although total market funds invest in all capitalization levels, the market is so skewed toward large firms that many total market funds don't have any significant small cap exposure. It's common for individuals to hold a small cap fund to compensate for this, but it's not actually required by investment theory. In principle, the most diversified portfolio should be market-cap weighted, so small cap should have negligible weight in your portfolio.
I would say your decision making is reasonable.  You are in the middle of Brexit and nobody knows what that means.  Civil society in the United States is very strained at the moment.  The one seeming source of stability in Europe, Germany, may end up with a very weakened government.  The only country that is probably stable is China and it has weak protections for foreign investors. Law precedes economics, even though economics often ends up dictating the law in the long run. The only thing that may come to mind is doing two things differently.  The first is mentally dropping the long-term versus short-term dichotomy and instead think in terms of the types of risks an investment is exposed to, such as currency risk, political risk, liquidity risk and so forth.  Maturity risk is just one type of risk. The second is to consider taking some types of risks that are hedged either by put contracts to limit the downside loss, or consider buying longer-dated call contracts using a small percentage of your money.  If the underlying price falls, then the call contracts will be a total loss, but if the price increases then you will receive most of the increase (minus the premium). If you are uncomfortable purchasing individual assets directly, then I would say you are probably doing everything that you reasonably can do.
It is absolutely feasible to move your savings into Canada. There are a few ways you can do it. However it is unlikely you will benefit or avoid risk by doing so. You could directly hold your savings in the CAD. Investing in Canadian bonds achieves a similar goal as holding your money in the CAD. By doing so you will be getting re-payed with CAD. Some Canadian companies also trade on US markets. In addition some brokerage firms allow you to trade on Canadian markets. The problem with any of the options is the assumption that Canadian banks will fare better then US banks. The entire globe is very dependent on each other, especially the more developed nations. If large US banks were to fail it would create a domino effect which would spiral into a global credit crunch. It wouldn't matter if your invested in Canadian companies or US companies they would all suffer as would the global economy. So it would probably be more valid to refer to your question - enter link description here If you are referring to weather the Canadian bonds would be a safer investment over US Treasuries it would all depend on the scenario at hand. Investors would probably flock to both treasuries.
"Option 1 is out. There are no ""safe returns"" that make much money. Besides, if a correction does come along how will you know when to invest? There is no signal that says when the bottom is reached, and you emotions could keep you from acting. Option 2 (dollar cost averaging) is prudent and comforting. There are always some bargains about. You could start with an energy ETF or a few ""big oil"" company stocks right now."
"A paper EE series US Savings Bond is what is called a zero-coupon bond: you buy it at a discount from the face value (50% discount for US Savings Bonds), and it earns interest though you don't get the interest as cash (that you could invest elsewhere). Instead, the interest earned increases the redemption value of the bond -- the money that you will receive if you take the bond to your bank to cash it in before the maturity date. When the bond finally matures, its redemption value has increased to the full face value. The maturity date for paper EE series US Savings Bonds issued in May 1995 is 17 years. Now, with zero-coupon bonds in general, the IRS requires that the interest earned each year be reported as interest income even though you did not receive any cash income, and tax is due on the interest (unless it is a tax-free municipal bond or the bond is held in a tax-deferred investment such as an IRA or 401(k) plan). However, there is a special exemption for EE Series US Savings Bonds in that the owner has the option of not declaring the interest each year but instead reporting all the accumulated interest as interest income in the year of redemption. (Most people choose this option). It is not capital gains as you would like to be. So, if your grandfather paid $11K$ for EE series US Savings Bonds in May 1995, the face value of the bonds he received was $22K, and, assuming that your grandfather followed typical practice, the bonds were worth $22K in May 2012, and $11K interest income needed to be declared that year. This matches up pretty well with the amount the IRS told him was interest income on which he had to pay income tax (though the year is off by 3). Now, your grandfather died in 2008, and what happened to the bonds depends on in whose name(s) the bonds were registered (e.g. was your father named as the survivor on the bond), or, if your grandfather was the sole owner, how your grandfather's estate was handled (the interest accrued till your grandfather died belonged to the estate).
Funds specializing in short-term treasuries or short-term high-quality bonds of other types are basically a substitute for a savings account, CD, money market fund, or other cash equivalent. Use as appropriate but there is little diversification here per se. In short, there is some value in diversifying across asset classes, and it is open to opinion how much you should do. Less well-justified is diversifying across managers within the same asset class. There's very little if any advantage to doing that."