Will bond prices recover like stocks ? I hold a bond etf and the price is down 7%, will it recover?

Question

Or should I sell?

Answer 1

The markets go up and down, they don't go up OR down.

The markets have always come back and today is no different, eventually the markets will come back.

If you're a trader, you would be not hold positions that have dropped more than 10%,  if you're an investors (and you are with bonds & ETF) it would be very foolish to sell or consider selling in the a dropping market like this, since it has been bouncing around

Answer 2

I suspect that you have plenty of company in this horrible economic climate, where bad news abounds on all sides.

Count me as one of your fellow sufferers.  I have Bond ETFs and REIT ETFs, plus mutual funds, and am down about 6% YTD.  

Not a nice situation, considering that it would take an increase of about 7% just to break even for the year - that is the market has to go UP by 7% for me to NOT lose anything, much less talk about profit or inflation.

If you can stomach this period, do not sell. Just hang onto it and hopefully, things will get better in 2009.

But if you need the money for living ( if you're retired , for example ),  then sell and put the money into a CD or money market fund.  You will sleep better at night.

Answer 3

You forgot "Inflation"

Bonds ALWAYS go down in an inflationary environment.

I see no end in sight with 142.00 Crude Oil.

It's Deja Vue all over again. Just like the late 1970's

Answer 4

Well the economy is pretty bad right now, I dont know if it will recover anytime soon. I would hold on it for a few more years until everything settles down.