Bond scenarios

[Hal]

Interesting viewing.

https://www.youtube.com/watch?v=2lHVs1XfbZ8

[mathjak107]

As of this morning we have Tlt down 15.50 ytd , the cash side is basically flat so we have a minus 7.50% average return ytd

Ief is down just 5% ytd

so there is a definite difference between 100% of the bond budget in ief vs splitting it between cash/shy and tlt ..

[Kevin K.]

And VGIT which I prefer for ITT's because it sticks to the (historical) classic "sweet spot" of ~5 years duration is down 2.45% YTD.

Of course all it'd take is one major market panic and flight to safety to make the traditional barbell look like the better choice, provided one can stay the course in the meanwhile with stocks having to pull all of the weight while 75% of the portfolio tanks.

[mathjak107]

That is why I say rising rates as a trend can be kryptonite. It really has not been tested in modern markets with a rising rate trend ...we have had a ski slope for the most part for 40 years

[I Shrugged]

Now will be the test, then.
I'm belted in and going to be the crash test dummy.

However I will not be buying more to restore balances.

[mathjak107]

Me too ..I have a shitload of Tlt

[Cortopassi]

I will absolutely buy TLT if the band is hit.

[modeljc]

I will absolutely buy TLT if the band is hit.

How close are you to a band? Is TLT about 20%? If you play like core inflation is 2% and headline is 3 1/2% I wonder where that puts TLT.

[Cortopassi]

I will absolutely buy TLT if the band is hit.

How close are you to a band? Is TLT about 20%? If you play like core inflation is 2% and headline is 3 1/2% I wonder where that puts TLT.

I am at 22.65%. If I wouldn't have already rebalanced twice earlier this year, I probably would have hit rebalance by now....

[Kriegsspiel]

I will absolutely buy TLT if the band is hit.

How close are you to a band? Is TLT about 20%? If you play like core inflation is 2% and headline is 3 1/2% I wonder where that puts TLT.

I am at 22.65%. If I wouldn't have already rebalanced twice earlier this year, I probably would have hit rebalance by now....

Hey, we're damn close, I'm at 22.15%.

[modeljc]

I will absolutely buy TLT if the band is hit.

How close are you to a band? Is TLT about 20%? If you play like core inflation is 2% and headline is 3 1/2% I wonder where that puts TLT.

Guess I need to try to answer my own Question: If the market needs 1.5% or so for a real return and 2% if the market thinks core inflation is not going higher because of slack employment ect. then TLT drops about 30%. Anybody think it could be worst than that? Of course with negative rates in a lot of the world maybe we are close to a bottom?