Ask Terry Questions Bond mutual fund

Bond mutual fund

By Terry Savage on April 03, 2024 | Investments

Some years ago I invested in a bond mutual fund that invested in short term treasuries and high quality bonds. Unfortunately I did not pay attention and the value of the fund declined and has stayed down. How do I determine if I should sell and take the loss or continue to hold? Thank you.

Terry Says

When interest rates go up, bond prices go down — regardless of the qualify of the bonds in the fund. If you think interest rates will drop, then hold on to the fund. If it’s inside a retirement account, then you might better deploy your money — but that depends on your other holdings. If held outside a retirement fund, you can offset the loss against ordinary income –up to $3,000.



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