Flat yield curve and switching to intermediate Treasuries

Discussion of the Bond portion of the Permanent Portfolio

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dualstow
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Re: Flat yield curve and switching to intermediate Treasuries

Post by dualstow » Wed Dec 20, 2017 3:38 pm

By the way, Soph, what do you consider to be intermediate? Like 5- and 7-year notes?
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buddtholomew
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Re: Flat yield curve and switching to intermediate Treasuries

Post by buddtholomew » Wed Dec 20, 2017 3:40 pm

Cortopassi wrote:TLT has gotten crushed the past few days. I know that doesn't add anything to the discussion...
Who knew I would lose my shirt in bonds >:D
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Re: Flat yield curve and switching to intermediate Treasuries

Post by sophie » Wed Dec 20, 2017 10:37 pm

dualstow wrote:By the way, Soph, what do you consider to be intermediate? Like 5- and 7-year notes?
Greater than 3 years and less than 20?
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Re: Flat yield curve and switching to intermediate Treasuries

Post by ochotona » Thu Dec 21, 2017 5:29 am

sophie wrote:
dualstow wrote:By the way, Soph, what do you consider to be intermediate? Like 5- and 7-year notes?
Greater than 3 years and less than 20?
To me, Intermediate is 4 to 7 ish.
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Re: Flat yield curve and switching to intermediate Treasuries

Post by dualstow » Fri Dec 22, 2017 2:01 pm

I might put some intermediate notes in my vp.
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Re: Flat yield curve and switching to intermediate Treasuries

Post by Kriegsspiel » Fri Dec 22, 2017 8:39 pm

I've been rolling over 4wk treasuries for a while now outside of my PP, no complaints.
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dualstow
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Re: Flat yield curve and switching to intermediate Treasuries

Post by dualstow » Sat Jan 20, 2018 7:28 am

dualstow wrote:I might put some intermediate notes in my vp.
Sophie, that’s what I’m doing with new cash this month. I’m the last person anyone should copy. I only mention it because I’d feel guilty about vocally supporting long bonds and “secretly” eschewing it.

While I haven’t corrupted my pp, I’ve only added to the cash portion lately, or to the vp.
Intermediate treasury notes and short or intermediate corporate bonds.
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Re: Flat yield curve and switching to intermediate Treasuries

Post by ochotona » Sat Jan 20, 2018 8:42 am

FWIW, there is no long Treasury sell signal coming from 1-year lookback time series momentum. And momentum has been an awful strategy for long bonds, because they've been in a 35 year bull market. If the tide turns, I'm sure I'll be commenting on it. But for now, I would not sell any.
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Re: Flat yield curve and switching to intermediate Treasuries

Post by dualstow » Sat Jan 20, 2018 12:16 pm

My oldest bonds don't "expire" ( = only 20 years left) until 2020, and then I'm going to be forced to buy some new ones, or VGLT.
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Re: Flat yield curve and switching to intermediate Treasuries

Post by sophie » Sun Jan 21, 2018 6:50 am

dualstow wrote:
dualstow wrote:I might put some intermediate notes in my vp.
Sophie, that’s what I’m doing with new cash this month. I’m the last person anyone should copy. I only mention it because I’d feel guilty about vocally supporting long bonds and “secretly” eschewing it.

While I haven’t corrupted my pp, I’ve only added to the cash portion lately, or to the vp.
Intermediate treasury notes and short or intermediate corporate bonds.
I can't fault you at all! I haven't hit the Rubicon quite yet, but I will when it's time for the annual Roth etc contribution. I still have no idea what I'll do, but thinking I could get away with not buying bonds at all if I let them drift down to the 15% mark. I'm not sure even intermediate Treasuries are worth it, as they won't provide much of a gain if rates go down, and the yield is hardly better than the 2 year note.
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Re: Flat yield curve and switching to intermediate Treasuries

Post by ochotona » Sun Jan 21, 2018 8:45 am

I heard Bill Gross on a podcast saying that 10 year Treasuries will break even in 2018, if the interest rate for that bond stats below 3%. The bond value will decrease, but bond holders will get more interest on newly purchased bonds (this happens in a fund, where things are being sold and bought all the time to keep the duration stable).
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Re: Flat yield curve and switching to intermediate Treasuries

Post by buddtholomew » Sun Jan 21, 2018 10:45 am

Which asset will rise to buoy the portfolio if stocks fall?
I keep coming back to this fundamental question and all I come up with is gold, LTT’s and cash. We invest in the PP because we don’t know what the future holds even when it is clearly evident to the majority of investors. Remember the crowd is often wrong.

I continue to purchase ITT’s in retirement accounts bi-weekly and in taxable contributing to cash. LTT’s in PP still at 20% and I will probably be ready to purchase more when they reach 15%. What’s the alternative?
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