Key insights
- The user is questioning the perceived correlation between corporate bonds and stocks, seeking to understand if corporate bonds are indeed more closely tied to stock market movements than generally assumed. The core of the inquiry is whether a decline in stock prices automatically implies a risk to corporate bond coupon payments, suggesting a potential decoupling based on corporate ability to pay versus market sentiment.
I am investing in World Markets ETF’s and some government bond ETFs
I try to avoid corporate bond funds as you often hear that they might be more related to the market and stocks.
But thinking about that I wonder if that is true.
When inventor expectations are low stock prices fall.
But that should not necessarily mean that corporations are unable to fulfill their bond coupon payments.
I can imagine markets being down, but corporate bonds are still safe.
So my question is, is this alleged relation between corporate bonds and stocks real?