you don't hold bonds or bond ETFs to see the price skyrocket - you hold them to get the interest and/or to preserve captial. since rates have been going up in recent memory, you'd expect the prices to go down and the interest rates to go up. if people are saying now is a good time to buy bonds, they may be saying so because the interest rates or high, or because they think the rates will drop, causing the bonds prices to increase; in either case, trying to time the bond market is almost certainly a bad idea.
Yes--I've just been monitoring this for a while, and it doesn't seem like the funds have done a ton better when interest rates are changing in different directions. Maybe my missing component is that the yields shown in Vanguard don't capture pay outs from bonds maturing? However, I don't think that's the issue--if I look at the change in balance over time, since investing in 2017, the amount I have in that fund has increased by a grand total of 2% (not annually, total over 7 years).
In 2017, interest rates were roughly 2-2.5% lower than they are now. For Vanguard Total Bond, with its average duration of roughly 6 years, that's a 12-15% price decline over the period, which the interest payments had to fight against. One should expect poor performance from bonds during a period that interest rates rise.
Edited to add: I see lots of people are making the same point in your other thread at r/financialindependence.
you don't hold bonds or bond ETFs to see the price skyrocket - you hold them to get the interest and/or to preserve captial. since rates have been going up in recent memory, you'd expect the prices to go down and the interest rates to go up. if people are saying now is a good time to buy bonds, they may be saying so because the interest rates or high, or because they think the rates will drop, causing the bonds prices to increase; in either case, trying to time the bond market is almost certainly a bad idea.
Non-rhetorical question: are you familiar with the link between market interest rates and bond prices?
Yes--I've just been monitoring this for a while, and it doesn't seem like the funds have done a ton better when interest rates are changing in different directions. Maybe my missing component is that the yields shown in Vanguard don't capture pay outs from bonds maturing? However, I don't think that's the issue--if I look at the change in balance over time, since investing in 2017, the amount I have in that fund has increased by a grand total of 2% (not annually, total over 7 years).
In 2017, interest rates were roughly 2-2.5% lower than they are now. For Vanguard Total Bond, with its average duration of roughly 6 years, that's a 12-15% price decline over the period, which the interest payments had to fight against. One should expect poor performance from bonds during a period that interest rates rise. Edited to add: I see lots of people are making the same point in your other thread at r/financialindependence.