I'm not sure that I understand why you are saying..."I sold them after the yields went so low and I felt they simply weren't worth holding."
Stock Bull, I wrote that, not Mr. GJ (who still holds his 9%+ bonds).
My point was this: If you bought $10,000 worth of 30 yr bonds at 9%, and 4 yrs later the current rate is 5.6%, one way to view your current holdings is at their current value & yield. I have no idea what that would be in the example I just gave, but let's say it's $18,000. So, *I* prefer to view such a holding as $18k at 5.6%, because, in fact, that is their current value.
At the time I sold, I thought 7% was going to be the lower end of the range for the long bond. Indeed it was, for a time. But, looking back, it's obvious there were substantial additional capital gains remaining. In fact, even if rates had remained steady, 7% - in retrospect - doesn't sound that bad!
Ken |
