VIII.11. Strategies for trading bonds.

  1. Bonds are a very specific tool that requires flair and work with analytics. Here are the main strategies when working with this tool.
  2. 1) A good strategy is a combination of IIA + FLB.
  3. 2) When choosing high-yield bonds, divide parts of your capital so that in the event of a technical default, you will not suffer much. A good idea would be to invest 80% of your capital in FLB and 20% in high-yield bonds with monthly coupon accrual. This will allow you to earn income quickly and exit if necessary.
  4. 3) A good strategy can be considered as follows: 30% in FLB, 30% in medium-income bonds and 30% in high-risk bonds. It is also possible to calculate the percentage of deposits in each of the three types of bonds in such a way as to completely eliminate the risk of capital loss by obtaining coupons for the other two instruments.
  5. 4) An excellent strategy is to buy the bonds of the issuer with state participation that have fallen in price.
  6. 5) A number of foreign authors preach a strategy of buying junk bonds in crises – the price is very low, and coupons are still paid.
  7. 6) Usually, if bonds fall, then stocks rise and vice versa. Use this strategy to transfer capital and increase profits.
  8. 7) Stocks are falling – we compensate with coupons from bonds. The strategy is when 50% of the capital is in stocks, 50% of the capital is in bonds.

8) For the most conservative, a good strategy would be 50% of the capital in the bank (there is no risk of the instrument price sagging), 25% in FLB bonds, 25% in Gazprom JSC shares. Stocks can give income in the form of dividends, and bonds give coupon income.

Leave a Reply