It seems naive to read warnings to the buyers of corporate bonds that they will loose money. The basic assumption is that both sides of the transaction are aware of the basics, they should just have different expectations.
The explanation given is that buyers are looking for quality investment. Under what calculation, a sure drop in price becomes a positive return?
There could be a sharp pencil expecting still lower yields in contrast to an uncertain world where US Corporations might continue making a deeper dent.
In the other hand, in a global market, the expected depreciation of other currencies might easily cover the devaluation of the principal. Then, it comes the reinvestment at higher yields if the warnings are correct. But this already makes it an unsafe strategy compared to what the original assumption was when trying to explain why so many buyers are snatching very expensive bonds.
Follow the money and the end of the month data, and answers might reveal themselves.
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The numbers show that a lot of the flight to bonds are 401k owners.
