Why it's good idea to hold bond funds for at least two years

Are you frustrated with negative YTD return of bond fund such as iShares iBoxx $ Invmt Grade Corp Bd ETF (LQD) and considering bailing out? If so, think twice before bailing out. Bonds follow a pattern. Most of negative return years are followed by oversized return during subsequent year as seen below in year by year performance of LQD etf.

So having little bit of patience could be your best friend when it comes to investing in bond funds. When held for 2 years, performance tends to revert to median return.

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