Bond Investing 101--A Beginner's Guide to Bonds

[@Hello-rl6lp]

I learned more from this 45-minute video than an entire semester of Finance. It was concise but detailed.

[@marygaus]

Rob - The way you organize your thoughts is absolutely FABULOUS. I’ve never really understood bonds so I’ve avoided them. Until now! In 45 minutes, you cleared up my confusion and I now have the confidence to consider including them in my asset allocation. I’m within 7 or 8 yrs of retirement so it’s high time. Thank you!

[@Johnluthecomposer]

This is the best introduction video on bond investing I've come across in a long time. Instant subscribe! Please never stop educating the world with your knowledge and the fascinating delivery of that knowledge.

[@elsemuller2460]

2 years after the video was aired Rob Bergers strategy to invest half in traditional bonds and half in TIPS (following David Swansons approach) was very good. Despite their negative yield at the time. As he said "just in case inflation rises"... Same with his attitude towards the hyped ARK Funds: just before their total decline he explained why he would never invest into them.

[@AlvaSudden]

I buy individual bonds, and don't find it a problem to keep records. I like 'em because I know exactly what my return is. Occasionally I sell one but then I have to figure capital gain/loss, which is a pain. My bond portfolio is about 600K, half in IRA. I just want people to know it's doable (and fun to pick out bonds). During Covid, airline bonds were an amazing deal. Should sell them now, maybe I will....

[@emmeohohjay2749]

I have been trying to understand this for over a month now- yield, bond fund prices, interest rates, etc. An explanation that could make sense to me was not to be found in all the content I’ve consumed in the past 4-5 weeks: audiobooks, podcasts, blogs, Reddit… I just finished watching this and I FINALLY “get” bonds/bond funds. And it’s literally only because of your video. Your explanation of why purchasing your own bonds may not be practical was the missing piece to tie it all together. I just could not understand why anyone would buy into a bond fund instead of purchasing their own at a rate they found agreeable. I felt like I was missing an important piece of the puzzle (and I definitely was!). Thanks so much for taking the time to share your explanation- it was the version that finally made it click. :)

[@brianjp18]

I’m a new investor and spent probably several days of research getting a grip of the fundamentals of bonds and bond funds. Had a just watched this video I would have been set. Clear and concise. I would LOVE for you to do a future video in the same fashion explaining TIPS and TIPS funds. Still trying to get a grasp on the fundamental and utility of that investment option.

[@RickMartinYouTube]

Wow - thanks for the thorough explanation and your taking the time to educate your viewers. Respect. I learned something very useful other than the basics - to not be too alarmed about short term changes in the interst rates/bond prices and if you're a longterm investor in BOND mutual funds/etfs you can be assured that fund will correct over time in response to the market. Crazy that you only have 20-30k subs for so much great information/education.

[@campsitez2355]

IF YOU DONT HAVE GRAY HAIR MAYBE CONSIDER NOT INVESTING IN BONDS AT ALL ????

[@davidburrus9813]

Such a talented instructor!

[@BY-ix9ye]

Hi Rob, thank you for what you do. The way you explained the concepts was easy to follow for beginners. I wish I had someone like you teaching me in school. You would be a great professor.

[@armaan8449]

Thank you Rob for explaining bonds investments in clear and simple terms. I was trying to understand for long why bond ETFs (VGLT, BND) are paying so low compared to S&P 500 (VOO) in last 5 and 10 years. And was avoiding investing in bonds due to it. I am planning to invest in I- bonds and BND for my 20% allocation in bonds.

[@dan4724-k7x]

Great video!! I think there's one small issue at 3:22, when you talk about a $10K bond with 2% interest ($20). The video says, "Whatever the interest is, you're going to get that every 6 months." I interpret that to mean you'll receive $20 every 6 months, but I think you meant $20 per year split into 2 installments. Otherwise the bond would pay $40/year or a 4% coupon. Anyway, loved the video -- super informative.

[@pourquoi475]

I’m a tax accountant and often work with original issue discounts and bond premiums (and their amortization) on tax returns. You explained this so well for everyone to understand. 😊. Thank you!

[@sharondruzynski3005]

Thank you for explaining things so clearly for a relative newby in this arena

[@ericjuli6576]

A large portion of my Macroeconomics class summed up in 45 minutes!

[@desiexpat7]

Besides everything else especially appreciate your bond duration explanation and the applucable discounts. This is really very helpful. Thanks!

[@ReuvenLerner]

I've been searching for a while for an explanation of bonds with this level of depth and clarity, and I'm delighted that I kept looking! This is precisely the introduction that I needed, explaining the terminology and investing strategies in a straightforward way. Thanks so much for your work!

[@lw9936]

@Rob Bergr: you worked on weekend for us. thank you so much for addressing this topic! I have learned a lot!

[@lw9936]

@Rob Berger, Does rising Interest rate affect VNQ Reits etf? thanks

[@stupossibleify]

Damn, this timely video is just what the doctor ordered. Always struggled to understand bond pricing, thanks for making it simple

[@ianwhitehead7247]

This was super helpful. Simple to understand - thanks a ton.

[@cahoonm]

Thank you. I felt like a friend was talking to me in your presentation. Thank you

[@jackydaxter2220]

Very down-to-earth and simple explanations, I appreciated it a lot thanks . I would have loved a short guide to buy individual corporate bonds though

[@freeroamer9146]

Bonds can really get your head spinnen! Nice job, I learned a lot!

[@Puffintrading]

Thanks Rob. Really helpful. The only thing I don’t think you touched on was selling out of your bond fund. If you wait until maturity on a treasury bond, you get your principle back, weather or not rates have gone up or down. What happens in a bond fund as there is no maturity date? If in 5 or 10 years you want to sell but the fund has lost value, isn’t that a risk compared to holding a 5 year or 10 year treasury to maturity? Thanks!

[@denniskirschbaum9109]

I've been investing in bond funds for more than 30 years and I feel like I understand them for the first time! Thank you so much! You are a fantastic teacher!

[@ivanbarroso9610]

This really helped me understanding the overall bond economy , thank you

[@lenjoplus]

As somewhat of a novice, found his explanations clear and easy to follow.

[@wilma6235]

This was great. Exactly what I needed.

[@glen7999]

Thanks for the info. I have in the past stayed away from bond funds because of low yields and lack of good understanding how they work. As I enter retirement I am rebalancing my portfolio and may use bonds in place of some CD's which pay even less. Been enjoying your content.

[@candycrusher45]

Wow this is so good and a lot to digest. It's late so I'm going to have to come back to this so I can absorb everything. Thank you so much for this!

[@amirrosner3243]

Hi Rob - thanks for this wonderful video. Super clear

[@fhowland]

Man this video aged well! Rob called the inflated bond prices coming down to a T.

[@LouisBell-k4t]

Rob, thank you very much for this information. Like others have said, you articulate the key concepts so well. Very useful 👍

[@michaelratchford9508]

Rob. Thanks for this video. A very clear explaination. It's an area of my portfolio that I didn't quite grasp..until now. I really enjoy your channel --you make things much easier to grasp

[@coderider3022]

I think single bonds are the preferred approach as they guarantee you won’t make a loss. You might get a low return and get frustrated when you see better deals but having a ladder to cover a 2-3 year market issue would be better than a fund, your on a journey.

[@HenryLucask5l]

Investments are the roots of financial security; the deeper they grow, the stronger your future will be."

[@GraziaMacahilas]

The deeper your investment roots, the stronger your financial security will be in the future.

[@BarbaraMarks7s]

Exactly! With my adviser, I’ve cultivated deep investment roots, strengthening my financial security for the future.

[@MargaretOlivia2u]

I would love an introduction to an adviser who can help me strengthen my financial roots.

[@BarbaraMarks7s]

My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further.

[@MargaretOlivia2u]

Thank you for this amazing tip. I just looked the name up and wrote her.

[@Acton65]

Fantastic! Just the subject I need to know more about. Thanks.

[@InTheMoneyAdam]

What is the difference between the 12 month yield (or TTM) and SEC yield? I understand the TTM is the dividend (or distribution) annualized, but where does the SEC yield come from and how is it useful?

[@BuddyDog9267]

Very interesting. Well done. Thanks.😮

[@jbt8484]

I have recently discovered your channel, very good content and education. Thank you

[@Shadowguy456234]

Excellent overview, even for a neophyte like me. One addition, I would suggest looking into BNDW, which is Vanguard's world bond fund - currently ~50/50 BND / BNDX (so 50/50 US and international bonds). Up to you, and your hedging needs.

[@happytravels2480]

Rob, thank you for making this video! I understand the relationship between interest rates and individual bond prices, but I’ve always wondered how it affected a bond ETF or mutual fund. I’ve never heard anyone else address this topic before. Your explanation makes me a bit more comfortable keeping some bonds in my portfolio going forward with the risk of rising rates. They are kind of like dividend stocks in that even if their price goes down, their yield goes up! I look at it as a win win either way with both. On a side note, I love your laid back, calm presentation style, and lack of click bait titles👍

[@samari1011]

Brilliant work. Thank you very much.

[@DeepakSingh-hl3er]

Amazing video to learn about , very informative & real life examples.

[@feirnd1]

This is a great lecture! Given the terrible yield, what's your opinion view of {stock + cash} portfolio?

[@dalalalterkait2163]

That was extremely helpful. Thank you

[@ivanst-pierre5199]

Excellent educative video, thx!

[@joelcoll4034]

This is all the information I wanted and couldn't find, thank you!

[@EJJ-EvArms]

After 37+ years in IT working for an inter-dealer brokerage whose clients are mostly the banks and primary dealers in US securities, your concepts are spot-on, but my goodness, your math lol. ;-)

[@johnguertin5054]

How about managed bond funds vs bond index fund pros and cons?

[@derrickollinger3411]

This is a great video! Well done! I do have a question. When you buy a bond fund (let's say Vanguard's BND), do you make money simply from the appreciation of the NAV or do you also get money from the coupon payments? Thanks for this good info!

[@QGDeclined]

Awesome intro to bond structure and investing!!

[@michaellaforte6964]

Super helpful! Thanks Rob!

[@Propguypaul]

Thank you Rob for an excellent explanation of bond and bond fund structure.

[@rickm8456]

Thanks for taking the time to do this!

[@robertstockdale7729]

Very good video it was just what I needed to venture into bonds

[@deepsudeep]

Thank you! Coupon rate is money per year not every 6 months?

[@weixia1191]

Can you explain the tax implications of different bonds and the strategy for buying various funds for taxable vs non-taxable accounts?

[@pekicpfc]

Amazing value. Lengthy yet sufficient and not overwhelming!

[@EVATUBE1]

Thank you so much for this. This was super helpful and very educational. I learned so much and the way you explain was very clear and easy to understand!

[@SecondActswithMarco]

This an excellent explanation of one of the most distasteful subjects: bonds. Most investors buy bonds to counter balance the rise and falls of stocks. But so many times they don't inversely correlate. I know bonds correlate to interest rates but still...these buggers are just frustrating. Bond price goes up and yields go down...this is so confusing for the laymen...

[@ajdizzy]

As someone who is new to bond investing, my question in... is buying bond funds actually 'safe' enough to consider part of your balance portfolio? (to offset risk of stocks)

[@JohnDorman-tt7pf]

Excellent job explaining bonds!

[@InterCity134]

The question I have is being in my 50’s and my taxable account being all stocks , while the 401k has some bond exposure in the subset that is a 2030 targeted fund , how does one move from say 98% stocks to 65% stocks given the huge capital gains that would be triggered with some of the taxable stock sales I’d have to do?

[@PH-dm8ew]

@rob Berger: so if I have a bond paying 4% which matures in 5 years and I don’t sell it; I don’t lose other than opportunity cost because I can get 5.5%.

[@John-eq8cu]

very impresive, thank you.

[@Mourik131]

But in a etf or you stack your self with dollar cost averaging you don’t really have that problem especially when you do short term bonds. I use VEMT etf. Government emerging market bonds and VUTY usd government bonds. Off course I also have vti. And it works like a charm.

[@buttonsplaymusic4896]

Please do an update for 2023, when rates have gone up the way they have. Not a new video maybe, but something to add onto this one. Maybe during that video, you could also contrast how bonds look to the investor in the period of time in this video, versus current. And maybe you could say, the best time to buy Xtype of bond would have been DATE, and this other type of bond DATE, because, but the worst time would have been DATE because. And maybe you could talk about the new SGOV etf and compare it.

[@Angelthedog]

Great work, Bob. Very helpful. Thanks.

[@CaptainBenjamins]

I’m 100% VTI

[@travis1240]

What do you think of muni bond funds held in taxable brokerage accounts?

[@danielclementson4009]

@rob_berger How do you do the digital whiteboard? It's a nice touch.

[@AdityaKumar-be7hx]

Thanks for sharing the knowledge. I learnt a lot. However, I am now a bit confused with viewing bonds as "safety" against total stock portfolio. If interest rate going up is bad for bonds and consequently for companies so stocks won't go up either, where is the safety net? Aren't stocks and bonds supposed to react opposite to fed interest rates? Where am I going wrong in this?

[@honmingwong5759]

Enjoy watching all your videos

[@DumbUserName782]

Great explanation for a newbie like me. Thank you so much!

[@victorm.perezmora2624]

What happen if withdrawal an amount, let say 10%, before maturity?

[@vhsixtytwo]

Thank you for many great video Rob. I have question if anyone can answer. VCLAX Vanguard California Long Term Tax exempt in my taxable account. concentrate in California and tax free BND Vanguard total bond, more diversify but not tax free The performance of VCLAX on Portfolio Visualizer is better than BND plus I got tax free in California, is there a reason I should put money in BND instead of VCLAX? Thanks Van

[@desipianistdubai144]

So well explained! Thanks a lot

[@nasryfawzy2578]

Thank you very much for the comprehensive coverage.

[@jack91522]

How do you feel about 80/20 vtsax and vtblx for fat fire?

[@JO091715]

but I’d go VTI and BND

[@ursofranc]

I'm surprised you are not a fan of bond ladders! They are super easy to construct and maintain. Schwab actually has a tool that makes it extremely convenient and logical. I was in the Vanguard Total Bond Mutual Fund and then ETF for years and it has been a complete dog. At least with the bond ladder I can basically dampen fluctuations in interest rates.

[@JohnSmith-hw3ef]

@Rob Berger, thank you for this great video. I just want to clarify your example on the coupon rate. Coupon rates are annualized. The example that you cited, the $1000 bond with a 2% nominal yield would be paying $10 every six months not $20 as you stated. The $20 is the annual coupon. Therefore, the holder of that bond would receive half of the annual rate for every six months such holder held on to that bond.

[@pnkrckmom]

Thank you for this video. I still don't feel "great" about bonds. The less I have to tinker with my investments, the better.

[@samraat3424]

Thank you Rob. I didn’t know anything about bond investing. I may have to watch this video again to understand it even though it is beginners guide. One question I have is what would be the approach if I want to include municipal bonds in the mix?

[@panamahub]

Thanks Rob, I'm taking notes .

[@LastSider]

For my own behaviour, Ive found I like it better to screen for & and buy/sell individual T-Bill/Note/Bonds instead of Bonds ETFs which the price/yield can fluctuate. At the moment(12/2024), you can get Notes/Bond with a 6-7% coupon rate. Or, you could go the easier route and choose a Money Market Fund from your brokerage account, lower yield than the coupon rates but easier to manage.

[@PeterRanieriII]

Thanks for all the info, currently STIP looks very attractive. Also 4-week t bills yielding over 4%! Are these good ideas?

[@eqqq54]

High yield bonds are toxic

[@MC-gj8fg]

I understand so little about bonds that even this 101 class is frankly above my head. While I know the old paper bonds had a duration I thought these bond funds/etfs we invest in through our 401k on brokerage were the kind of thing that we could sell out of at any point as I might a stock. I rebalanced my 401k to omit 8% of bond funds last year. Might I have made a big mistake or am I, as the bond fund/etf holder less affected by duration/maturity than if I held individual bonds?

[@clarazegarelli5861]

you can buy or sell at any time. the maturity- duration number is a average of every bond the ETF has it is just to give you an idea of what they have. if one bond matures, they will buy others. you dont have to worry about managing anything.

[@Thea-gj2or]

@@clarazegarelli5861 hey. What kind of fee's can i expect to get hit with on a round trip? I know they get me for a couple tenths of a percent on my stock funds. Sorry to ask this 2 months after your reply.

[@Thea-gj2or]

@@clarazegarelli5861 in 401k

[@alexanderp258]

For GOVT (Total US Treasury Bond) is any advantage vs VGIT (Intermediate US Treasury Bond)? There is no too much historical data for both ETFs, but seems that GOVT is a bit more volatile. Otherwise both are very identical.

[@markc5771]

Great stuff starting at 16:31

[@moayadomar1955]

I am a new subscriber to your chanel, you are simply AMAZING sir, thanks

[@CyFi6]

Thank you so much. What happens if you buy an individual bond and the borrower pays off their loan before maturity?

[@rob_berger]

They can do that if the bond is callable. U.S. gov't bonds haven't been callable since 1985. But it is something to consider if you are looking at other bonds that have a call option.

[@Mossy_FieldStone]

Great video I’ve learned more about bonds in this video than all the other ones I’ve watched combined.👏👏👏 one question though how could you have not seen that inflation was coming?🤔 nevertheless great video.👍

[@jaehus1971]

Excellent video. Thank you !

[@cu99460]

Forgive me for asking this stupid question - beginner investor here - will I have to wait until the bond matures in order for me to make all my money back? Is there a possibility that I can get my money back early and make a profit? How would that scenario exactly work? I e if the bond price goes up how do I get a early win if that make sense?

[@Jay1971lion]

Rob, I’d enjoy if you used this as a portfolio analysis or maybe did an episode. Compare the following portfolios on Portfolio Visualizer, rebalancing annually or quarterly: 70% VTSMX, 30% VFISX; 70% VTSMX, 30% VFITX; 70% VTSMX, 30% VUSTX. Performance of longer term bonds are better with the same STDEV. Then run the bonds on their own, vastly different. Can you weigh in? I’d enjoy reading the comments as well.

[@michaelhoogendam8728]

many thanks great video

[@richardbudzic6289]

Buying long term bond fund, wouldn't be kind if like buying an annuity?

[@c.thompson6638]

Great video and explanations Rob. I am a new fan. However, factor in inflation and bonds are just plain boring, if not losing propositions at today's rates. There's very little money to made in bonds today IMHO. And financial advisors keep pushing them. Go figure.

[@laurentv2010]

Excellent presentation!

[@Qqxx22]

This is probably gonna be a dumb question but here it goes: When you have a portfolio of let’s say 60% stock and 40% bonds, and every paycheck you have $1000 every paycheck to invest. Is that $1000 dollars going to be split up like $600 goes to stock purchase and $400 goes to buying 400 dollars worth of bonds? And for a 60/40 portfolio you are to do this every time you invest ? Obviously I’m confused and probably over thinking. Thanks for any help

[@chiragpatel6771]

Yes 60% stocks and 40% bonds. Your overthinking it. 600 in stocks/ 400 in bonds

[@Qqxx22]

@@chiragpatel6771 thank you 🙏