7-10 Year Treasury Bond Fund ETF as a proxy for Cash

[robtkatz]

For the cash portion of my Permanent Portfolio, I'm using IEF: iShares Barclays 7-10 Year Treasury Bond Fund ETF.  Is that a good proxy for Cash?

[Pointedstick]

Nah. Cash isn't where you want your volatility. Stick to SHV, SHY, or treasuries. The more you increase the duration on the bonds you use for cash, the more the cash quadrant of your portfolio resembles the bond portion, which can decline sharply during periods of inflation or rising interest rates.

[Ad Orientem]

No. Cash is for safety. That's not safe and there is way too much potential volatility there. It could skew the returns on your PP.

[robtkatz]

For the cash portion of my Permanent Portfolio, I'm using IEF: iShares Barclays 7-10 Year Treasury Bond Fund ETF.  Is that a good proxy for Cash?

Nah. Cash isn't where you want your volatility. Stick to SHV, SHY, or treasuries. The more you increase the duration on the bonds you use for cash, the more the cash quadrant of your portfolio resembles the bond portion, which can decline sharply during periods of inflation or rising interest rates.

No. Cash is for safety. That's not safe and there is way too much potential volatility there. It could skew the returns on your PP.

Alright, gents, you've convinced me.  I'm going with SHY: iShares Barclays 1-3 Year Treasury Bond Fund ETF

[Ad Orientem]

[sophie]

Boy, that was easy.

Cf numerous previous threads about "improving" on the 25% cash allocation that everyone loves to hate :-)

Here's my favorite old thread on that subject:  http://gyroscopicinvesting.com/forum/pe ... -pp-asset/

[sophie]

If cash is the asset that everyone loves to hate, I'd say bonds is the asset that everyone hates to love.

That deserves a place in your signature line!!