Falling yields
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- I Shrugged
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Re: Falling yields
Man, I don't know. I keep running into business people and businesses that are desperate for workers. And big wage increases. I'll spare you the anecdotes, but they are everywhere.
My prediction, inflation soon and bigger than you expect. So will that be stagflation? Seems like a plausible scenario. But for how long, that's a bigger question. I also buy into the idea that this is still a deflationary world.
My prediction, inflation soon and bigger than you expect. So will that be stagflation? Seems like a plausible scenario. But for how long, that's a bigger question. I also buy into the idea that this is still a deflationary world.
Re: Falling yields
That's something else that doesn't seem to add up to me. Firstly, because aren't we supposed to be in the middle of an AI revolution that is reducing demand for workers? Second, unless workers have figured out a way to collectively organize to demand higher wages, I'm not sure how many people are going to be able to hold out very long once enhanced unemployment ends...at which time they will be back to competing with fellow workers in a global marketplace.I Shrugged wrote: ↑Thu Jul 08, 2021 6:12 pm Man, I don't know. I keep running into business people and businesses that are desperate for workers. And big wage increases. I'll spare you the anecdotes, but they are everywhere.
My prediction, inflation soon and bigger than you expect. So will that be stagflation? Seems like a plausible scenario. But for how long, that's a bigger question. I also buy into the idea that this is still a deflationary world.
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Re: Falling yields
This is my thinking as well.I Shrugged wrote: ↑Thu Jul 08, 2021 6:12 pm Man, I don't know. I keep running into business people and businesses that are desperate for workers. And big wage increases. I'll spare you the anecdotes, but they are everywhere.
My prediction, inflation soon and bigger than you expect. So will that be stagflation? Seems like a plausible scenario. But for how long, that's a bigger question. I also buy into the idea that this is still a deflationary world.
Re: Falling yields
I think there's an assumption in the above statement that there is a free market, with rational investors reacting to stimulus, rather than captured markets which are being manipulated by large actors. For example, if the fed/other central banks can print money and exert more influence than the independent actors, then I don't believe one can try to read any of this/draw any conclusions, as it's not what the markets think, but more about what these large, motivated actors are trying to accomplish.
It's unclear to me right now if there are honest market signals out there, or a distorted set of signals that can't be relied upon in the same way one used to be able to.
Re: Falling yields
Speaking of Falling Yields, I thought this snapshot of my IRA this morning was interesting. This is why I prefer holding my own bonds to buying shares. Fortunately, the amount I had in TLT was pretty small so I only lost $23.
Also, do you think I should sell that first batch of bonds when it goes < 20 years to maturity in November?
Also, do you think I should sell that first batch of bonds when it goes < 20 years to maturity in November?
Re: Falling yields
I suspect the apparent discrepancy here is that your IRA brokerage window was showing the current TLT price but delayed bond prices. The displayed bond prices were probably from market close yesterday (TLT's price rose by over 1% yesterday).pp4me wrote: ↑Fri Jul 16, 2021 11:54 am Speaking of Falling Yields, I thought this snapshot of my IRA this morning was interesting. This is why I prefer holding my own bonds to buying shares. Fortunately, the amount I had in TLT was pretty small so I only lost $23.
Also, do you think I should sell that first batch of bonds when it goes < 20 years to maturity in November?
It's annoying that the brokerage windows often display delayed prices from their bond desk, but it just seems to be how they do things. I noticed a similar discrepancy in one of my brokerage windows several years ago.
If you account for the delay in the displayed prices from the bond desk, I think you'll find that your directly held LTTs move roughly in line with TLT as they should.
- Mark Leavy
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Re: Falling yields
This was exactly my experience when I held individual bonds. Both the vanguard prices and the WSJ published prices were a snapshot of the previous day's prices. Either closing or around 12:30pm (not sure).
Re: Falling yields
I suspected something like that too but the TLT is also way down overall compared to the individual bonds - like +10% compared to +21, +32, and +16 respectively.Mark Leavy wrote: ↑Fri Jul 16, 2021 12:52 pmThis was exactly my experience when I held individual bonds. Both the vanguard prices and the WSJ published prices were a snapshot of the previous day's prices. Either closing or around 12:30pm (not sure).
And I don't even know how much the coupon payments factor into those rates of return.
But more generally speaking I have no regrets about holding any of those long bonds.
Re: Falling yields
The weighted average maturity of TLT is currently about 26 years, so its price should be moving roughly in line with LTTs with 26-year maturity, right?
If so, and if that's not happening, then it seems like we have a bit of a Scooby Doo mystery on our hands.
If so, and if that's not happening, then it seems like we have a bit of a Scooby Doo mystery on our hands.
Re: Falling yields
Even if there is a good explanation for the mystery I like seeing those batches of bonds outdoing TLT from time to time. Also like seeing the coupon payments, and not paying the TLT fee. Kind of like physical gold vs an ETF makes you feel.Tortoise wrote: ↑Fri Jul 16, 2021 2:14 pm The weighted average maturity of TLT is currently about 26 years, so its price should be moving roughly in line with LTTs with 26-year maturity, right?
If so, and if that's not happening, then it seems like we have a bit of a Scooby Doo mystery on our hands.
Re: Falling yields
Agreed. Ever since I learned how easy it is to buy individual Treasuries, I’ve been doing that in most of my accounts. Similar performance as TLT, but lower counterparty risk and no expense ratio. Basically a free lunch.
- vnatale
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Re: Falling yields
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."