aww they are almost there hah. I will admit, it did take me some thinking at one point to understand how the bond yield could affect price so much.
I had the "LT.bond aha moment" once in college studying how to account for bonds using "General Accounting Principles."
I was immediately interested and a tad taken aback at how bonds worked unintuitively. I found it so much more appealing than the alpha/beta/ratio stock pricing business.... Which seemed a lot more prone to unknown variables.
It wasn't until 2008 hit that I saw how well LTT's did and felt like I'd just discovered a new element. At that point, all I'd heard about LT bonds was "careful... When rates rise you'll lose your shirt."
Not that bonds are a superior asset class... But its a shame more people don't see them for their diversification benefit.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
dualstow wrote:
Ho hum, another 300-point drop in the Dow and 1+% gain in LT treasuries.
TLT breaching 129...
I love when TLT does "its thing."
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
I feel sorry for all those folks, years ago, who stampeded out of bonds because the Wall Street "experts" told them that "bond rates have nowhere to go but up."
Well, they will go up some day, but in the meantime I am harvesting the rewards of St. Harry B's well-known scripture: chapter 4, verse 25, also known as 4X25.
goodasgold wrote:
I feel sorry for all those folks, years ago, who stampeded out of bonds because the Wall Street "experts" told them that "bond rates have nowhere to go but up."
Well, they will go up some day, but in the meantime I am harvesting the rewards of St. Harry B's well-known scripture: chapter 4, verse 25, also known as 4X25.
Amen.
Yes, Amen! Let's also give MediumTex some credit because he has been a huge proponent of long bonds over the past few years as an important part of the overall portfolio. I sure wish him well!
Reub wrote:
What happens when the yield curve flattens like a pancake and possibly inverts? Is it the Big Boom?
Not if the Fed has anything to say about it!
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
And we've been told the last several years that interest rates had nowhere to go but up. Are US treasury yields heading toward Germany, Great Britain and Japan type yields?
Bond yields going this low has certainly been an education for me. I sold a few when the yield first dipped below 3% and thought I was some kind of market timing genius. So I was a shade underweighted in LTTs the last couple months only to see them recently pull even with my stock and gold holdings.
Alanw wrote:
And we've been told the last several years that interest rates had nowhere to go but up.
Well, they have nowhere to go but up if they are zero, although there are some strange cases of bonds trading at negative yields.
Switzerland has a 12 year bond trading at a yield to maturity of 0.3%. Even if the yield drops to 0%, the capital gain on that bond will be a measly 3%. Is this really worth the downside risk?
Alanw wrote:
And we've been told the last several years that interest rates had nowhere to go but up. Are US treasury yields heading toward Germany, Great Britain and Japan type yields?
why not?! dont markets largely move in tandem globally?
Alanw wrote:
And we've been told the last several years that interest rates had nowhere to go but up. Are US treasury yields heading toward Germany, Great Britain and Japan type yields?
why not?! dont markets largely move in tandem globally?
How many forum members at the beginning of 2014 thought long bonds would be the big PP portfolio winner for the year? If the US bond market follows global markets, we may have more upside. Could LTT's be the big winner again in 2015?
Fascinating to see this. I hope bedraggled forgives me for talking him out of loading way up on LTTs when they were at 3%. When I bought LTTs for the first time last year through TD Aneritrade, the guy who was taking me through the steps on their website said, "Er, I wouldn't buy those things if I were you."
barrett wrote:
Fascinating to see this. I hope bedraggled forgives me for talking him out of loading way up on LTTs when they were at 3%. When I bought LTTs for the first time last year through TD Aneritrade, the guy who was taking me through the steps on their website said, "Er, I wouldn't buy those things if I were you."
barrett, what, if anything, are you doing with your long-term treasury holdings? I have been tempted 6 out of the last 5 trading sessions to sell a portion and harvest some gains. I continue to sit tight as reducing my exposure to less than 25% could strain the performance of the PP if equities and/or gold declines. 30%+ gains are difficult to ignore if you believe in reversion to the mean. Alternatively, we have international investors purchasing our bonds to drive yields lower as US rates are significantly higher than international development countries. The higher dollar is icing on the cake.
SPY 27.10%
GLD 22.49%
TLT 24.50%
CSH 25.90%
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
barrett wrote:
Fascinating to see this. I hope bedraggled forgives me for talking him out of loading way up on LTTs when they were at 3%. When I bought LTTs for the first time last year through TD Aneritrade, the guy who was taking me through the steps on their website said, "Er, I wouldn't buy those things if I were you."
barrett, what, if anything, are you doing with your long-term treasury holdings? I have been tempted 6 out of the last 5 trading sessions to sell a portion and harvest some gains. I continue to sit tight as reducing my exposure to less than 25% could strain the performance of the PP if equities and/or gold declines. 30%+ gains are difficult to ignore if you believe in reversion to the mean. Alternatively, we have international investors purchasing our bonds to drive yields lower as US rates are significantly higher than international development countries. The higher dollar is icing on the cake.
