Bond market's losses may hit 40%, and retirees are most vulnerable

[Yo_Mama_Been_Loggin]

The post-election rally so far has been a boon for stocks and a bust for bonds. 

The yield on the 10-year Treasury closed at about 2.20% on Wednesday, up sharply from its all-time closing low of 1.36% in July. Since bond prices fall when yields rise, anyone owning longer-term bonds has taken a big hit. In just two days after the election, for example, global bond markets lost a collective $1 trillion.

If more of the same is ahead over the next few years, many investors will be in a world of pain, especially retirees, who could suffer 2008-style losses — this time in “safe” bonds.

So says Ric Edelman, executive chairman of Edelman Financial Services, a Fairfax, Va.-based financial planning firm that manages $17 billion for 31,000 families. Barron’s named the firm the nation’s No. 1 independent financial advisor in 2009, 2010, and 2012. He is also author of the recently updated bestseller “Rescue Your Money.”

http://www.msn.com/en-us/money/savingandinvesting/bond-markets-losses-may-hit-40percent-and-retirees-are-most-vulnerable/ar-AAkoLt7?li=BBnbfcN&ocid=edgsp

Add to that fucking with Social Security ad Medicare and it looks like many retirees may be on a diet of dog food.

[Vogon_Glory]

1. It may be worse than that

Frankly, I expect a lot of them will be facing not just poverty, but utter destitution.

And while it may be rude of me to say this, but I suspect that a significant percentage of them voted for TRUMP. They're about to have a nightmare remedial class on the links between fiscal policy and retirement portfolios, with instruction worth more than the hours of pro-Democratic ads and articles we helped fund when we donated to our candidates and causes.

[SleeplessinSoCal]

2. This hits home. 50 US savings bonds supposedly maturing soon,

Purchased at $25 to mature to $100 in 3 years. We see Financial Planner after Thanksgiving. I was hoping to put them into a better market for return. This, a small IRA, Medicare and Social Security are all I have. They all seem to be going belly up.

[Roland99]

3. And mortgage rates are rising. This will all but stop refis and hurt the burgeoning housing market.

[uponit7771]

8. 1..

[LAS14]

4. Question from an idiot.

If you purchased a bond intending to keep it til maturity, how are you harmed?

[wishstar]

5. Not harmed unless you need to cash it in before maturity

Higher interest rates will in fact help US Savings Bonds interest. Many US Savings Bonds purchased years ago when interest rates were considerably higher locked in high rates through maturity, others continue to get market rate to maturity. So only people who have to cash in Treasury bills and other bonds before maturity will take a hit as value is lower when interest rates rise.

[LAS14]

7. Thanks!

[uponit7771]

6. Yeap, the reason people are seeing a kick in equities is because of Bond market losses... people are

... moving their money out of the big money places and spiking the small money places