Bond funds in a ranging market

Today we continue with how to invest in bond funds during a ranging market.

Buy strategy

In a ranging market, unlike a bull market, pullbacks come easily — so what we do is: mainly buy on the drawdown.

① First tally the historical ranging-market monthly drawdown and compute the average monthly drawdown; ② When the current month’s performance is worse than the average monthly drawdown, buy in one shot.

📌 Example: a bond fund’s average monthly drawdown in past ranging markets was -0.5%, and this month’s drawdown is -1.2%, already worse than the historical average — so we buy in one shot.

Sell strategy

Because bond-fund returns are stable, low-risk long-term and small drawdowns, we can loosen the profit-tolerance condition and in a ranging market keep at least 1/2 of the position held.

① When year-to-date return > 50% of the historical average annual return AND this month’s return > the historical ranging-market average monthly return, sell 1/2; ② The remaining 1/2 position keeps looking for new buy points.

⚠️ This article is a methodological framework for illustration only and does not constitute any investment or trading advice. Markets carry risk; decisions require caution.