Chuck,
As I said previously, bonds are puts. Once that insight is understood, the bond game becomes obvious. E.g., on 01/29/21 I bought someone’s 7’s of '28 at 46.175. Why was the bond discounted? That was in the early days of the covid scam, and markets were taking a hit, esp. the energy sector.
Today, I’m being marked to market on that issue at 97.25. Do the math. That purchase represents a 110.6% gain on money put at risk. Meanwhile, my CY has been a decent 15.165% and will continue to be 15.16% until the bond matures in another three years, which is a highly likely event given where the bond is currently trading
Admittedly that cap gain is somewhat of an outlier within my total portfolio, with a more typical gain on spec-grade issues being in the range of 15%. But I’ve also done well with the common of that issuer, which underscores a second point. Bond investing is just value investing as Ben Graham laid it out in his classic intro, The Intelligent Investor.
Are there still things worth buying in the bond market? For sure, because there always are. Not as many as there were during the hay days of the dot.com era. But there are always opportunities to be found in any market --currencies, commodities, whatever-- for them willing to do a bit a basic research and to take on a bit of reasonable, prudent risk. The trick, as always, is to size positions prudently. Yeah, in retrospect, when a bet works out, one is always tempted to say, “I shoulda bought more.” But acting that on that thought is the sure road to ruin, in both directions.
If timidity keeps one from taking on prudent risks, then the after-tax “gains” to be made in the bond market won’t even cover inflation, as your report of what you own and traffick in clearly demonstrates, which is why I scoff at what you’re doing with bonds and why I consider it very, very bad retirement advice. If one acts from "boldness’ and makes out-sized bets, one might win the game occasionally. (Or win “bigly” as one idiot likes to say.) But those kinds of wins and winners are better explained by random chance than skill, and precious few investors sustain a multi-decades track record of above market success. (Ed Seykota, Linda Raschke, but few others.)
If you’re serious about getting serious about bonds, then you need to do some basic reading. The best intro for beginners such as yourself is Sharon Wright’s book, Getting Started in Bonds, coupled with a re-reading of The Intelligent Investor and a reading of Justin Mamis’ The Nature of Risk. Those three will cover enough of the mechanics of investing and the basics of investor psychology to get you started. The rest comes from hours and hours of running scans and from doing the green-eye shade, fundamental work that making prudent financial bets requires. Barnhill’s book is also worthwhile. After that, the lit is mostly directed toward institutional level investing and becomes tediously and unnecessarily mathematized.
To summarize: Buying bonds is no different than buying bell peppers or broccoli, and the same sort of common sense shopping principles one uses in the grocery store are all one needs in the bond and stock markets. (IMHO, 'natch.)
“Does this purchase offer fair value?”