Experts love to bring up the question of credit defaults when evaluating bonds. But here again, pundits generally generate more bluster than thought; the defaults rate is always built into the market price of a well-diversified fund.
Higher defaults are offset by commensurate higher rates.
These facts ruin arguments pundits have, when merely concerning values of individually-bought, non-in-kind, non-reinvested earnings, that apply to rates or interest-effected changes and looming inflation. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)
No comments:
Post a Comment