So let’s say the private credit debacle crashes the stock market by a large %, what happens to bonds and treasuries? Are they still safe? If they print money and then inflation gets worse is it still safe to be in treasuries/bonds?
I’m new to this topic. Thanks.
Private Credit Crisis and Bonds
byu/GiGiAGoGroove ininvesting
Posted by GiGiAGoGroove
3 Comments
Safer but nothing is safe.
There’s too many variables at play to simply answer that question.
Broadly speaking, t-bills and other treasuries should be the safest spot in that case, but as we saw in 2022, fast rate hikes meant that even they did poorly.
If you’re holding to maturity none of that matters, and if stability is your goal that’s what you’d do. That or money market.
Bonds can mean multiple things.
Corporate bonds trade on the market (and have ETFs) with a lot of correlation to stocks, but with less upside.
Gov’t bonds come in all sorts of varieties with their own risks, rewards, and opportunity costs. Like the other dude said, the secondary market value fluctuations don’t matter if you hold to maturity.
T-Bills and their ETFs like SGOV, are rock solid, but just barely beat inflation or a high-yield savings account. They are “risk free” though, to the same degree as a savings account.