do bonds,a.i,and commodity markets also get collapsed when equity markets collapsed as we seen recently in covid times?
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Hello.
It was observed that when the Covid lockdown was announced and the businesses were shut down, investors panicked and sold their equity holdings. In times like these ,investors run to safe heavens like investing in Gold or they invest in Bonds issued by the Central Bank as it is guaranteed by the Govt. and the Govt. can’t default. Also, in bad times interest rates fall. In March 2020 US Treasury yield fell to a low of 0.54%. and you know that Bond yields have an inverse relationship with Bond Prices, so bonds tend to do well.
all type of bonds like corporate ones,tends to do well or only govt backed bonds?
I guess as compared to the Govt. backed bonds, corporate bonds don’t do that well. Ofcourse, they may do better than the equity markets.