How to analyze when to cash out on a bond portfolio
With interest rate heading down now, if you hold a portfolio of bonds that were purchased a while back, one may consider cashing out in the near future.
For starters, how would you approach this project? Should I start collecting consensus data on interest rate outlook (the logic is to recommend cashing out when interest rate bottoms out)?
Also, I should consider the maturities of my portfolio holdings. Should I sell the longer maturity ones as they are the ones that appreciated the most due to the curve inversion?
Then after I cash out, which bonds should I switch into (shorter termed bonds since they have a higher yield now)?
Appreciate your thoughts.
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