40. Preparing for Rate Cuts: What are Bond Funds?
Description
What Is The Bond Market and What Are Bond ETFs?
CPI is “cooling off” which means inflation is trending closer to the Fed’s target, which means a rate cut MAY be in our future! What does that mean? Well if the Fed, you know, good ol "Papa Powell" who we keep talking about, well if they actually go through with cutting rates this is what happens. Interest rates for things like home loans get lower, but that means those high yield savings account rates also get lower. So where do you stash your cash and still get those great returns? Bonds. More specifically, we're looking at Bond ETFs.
We've talked about different types of low risk investing on Ep. 31 about Brokerage CDs but we want y'all to know about all the ways you can make your money make money!
Side Note
Check out Jessica Inskip's most recent appearance on the Schwab Network Episode where her worlds collide.
The Bond Market
Ok, so apparently there is not only a stock market, but also a Bond market. Where do we begin?
Need our listeners to know a few things:
You cannot time market, but you can prepare
We are not financial advisors, investing is personal. This is not that.
We are here for educational and information purposes only.
OK, let’s talk about what happened, and define the SEP - series of economic projections.
Most recent: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240612.pdf
Different ways to lock in rates:
CDs
Treasurys
Municipal Bonds
Corporate Bonds
Bond Funds
https://www.ishares.com/us/strategies/bond-etfs/build-better-bond-ladders
Ratings Guide:
https://www.fidelity.com/learning-center/investment-products/fixed-income-bonds/bond-ratings#:~:text=Investment%20grade%20and%20high%20yield,rated%20Ba1%2FBB%2B%20and%20lower.
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About Us 🌚🌞Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend who is a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We believe that investing is for everyone and that's why we break down complex investing topics (from "Her" perspective), show you free tools/resources on our podcast, and offer a ton of free educational content on our website!
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