How do you make money in this fund when all signs point to a rise in interest rates. We are just at the tip of the iceberg and this fund is getting creamed. What happens over the next several years when rates go back to long term averages?? You know they will!
You cant ...simple enough...Pttrax had a great long run...party is over and its a natural re-occuring cycle.....Bernankowebama has taken away any somewhat safe investment... time to sit on the sidelines and enjoy a less than 1% return until the dust settles
You can't, as long as bond yields are rising. Question is, will they. I would guess yes. As for when we're going to make $, when Bill Gross has a clue. I don't know, maybe I'm wrong-but it's hard to believe in Bill watching the fund get killed and underperfrom its peers lately. I was out in late May, on the sidelines. Better safe than lose a ton. I thought PTTRX was safe, but they still own (at least since their last statement) a ton of long term gov't bonds.
I don't know that they will ever return to what they were even just 5 years ago. The Japanese experience suggests to me that the rates in the US will stay down here in the 2.5-1.5 range on the 10Y for another 10 years. I don't see the growth that is going to support higher rates than that any time soon. I will make a prediction- by year's end, PTTRX will have gained 5% plus on the calender year. You just have to accept the occasional correction in bonds, or get out and go to a stable value fund where you can get 1.5% guaranteed.