Amid renewed interest, startups are changing the way bonds are traded • australiabusinessblog.com
have bonds a “meme moment” on Reddit, Bloomberg reported.
A caveat first: the trend is not comparable to WallStreetBets and its meme stock frenzy. The r/bonds subreddit forum only has about 8,000 members, not 13 million. But the fact that laypeople are talking about bonds is still a remarkable development for an asset class that never sparked much enthusiasm among retail investors – or anyone, to be honest.
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At its core, bonds are notes of government or corporate debt – except these notes can be traded (the BBC has a good Econ 101 interpreter on the subject.) But to keep it simple, let’s say bonds are debt. And debt is boring, right?
Well, for most people, making money is never boring. When inflation is high and stock markets are volatile, it means we need to look for new sources of return and diversification. We’ve already looked at how this created tailwinds from alternative assets, such as passion investments.
Bonds are not exactly alts – the once gold 60/40 wallet rule used to recommend owning 60% of stocks and 40% of bonds. But it’s fair to say that fixed income offerings like bonds are enjoying renewed interest, with Goldman Sachs curious earlier this month when it was “time to switch from stocks to bonds”.
