EDV???

[johnnywitt]

I've heard People say that STRIPS. or ZERO'S don't belong in the PP. If you are trying to wring out all the volatility you can and yields being so low, why not EDV?
HB said in the book "Why the Best Laid Investment Plans..." that he did in some cases recommend Zeros, but that the downside was the costs & spreads. This has changed now with an ETF like EDV and in a time of unpresented interests rates. WWHD?

[Smith1776]

You're right.

Even Browne himself, I believe in Fail-Safe Investing, used language as simplistic as "Just buy the longest term bond that you can."

What if the longest term available changes? What if the government starts offering 50-year or 100-year bonds? What if they discontinue the 30-year bond and only offer 20 or even 10-year maturities? What about zeros?

Really, there's no "right" answer here. As far as I'm concerned, the 30-year maturity was chosen because it was a simple, convenient, and easy choice that was widely accessible and worked well historically. If the available bond "menu" changes substantially we have but our own wits about us to figure out what to do.

[jhogue]

1. If the government offered 50 or 100 year bonds, I would buy them gradually to replace my current T-bonds. Why not? They would have a higher yield and volatility than current 30 year T-bonds, which PP investors should find encouraging. I think that the US issued 100 year bonds to finance the construction of the Panama Canal. Their risk profile was closer to US Agency bonds (like GNMAs).

2. I think that no 30 year T-bonds were sold for a couple of years at the end of the Clinton Administration, so we have already dealt with that challenge. Smith1776 is right, you simply buy the longest-dated Treasurys you can when you need them to rebalance your portfolio.

[boglerdude]

The more volatile the asset the less you can hold?

[I Shrugged]

The more volatile the asset the less you can hold?

Possibly so.

[Mark Leavy]

The more volatile the asset the less you can hold?

Possibly so.

Nothing wrong with that.

But it is messy. Volatility is an academic construct that works until it changes.

Harry was on to something when he talked about hedging against different economic climates. It's not the be all/end all. But you don't want to forget it.

Mark

[Hal]

The more volatile the asset the less you can hold?

Possibly so.

Nothing wrong with that.

But it is messy. Volatility is an academic construct that works until it changes.

Harry was on to something when he talked about hedging against different economic climates. It's not the be all/end all. But you don't want to forget it.

Mark

Here is a good example. Doesn't look too volatile, you could load up on this and have a stable portfolio
Oh wait, did I tell you the RBA is fixing the price by buying bonds?

What happens to the volatility when they stop price fixing.....
Perhaps this??