Falling interest rates
Moderator: Global Moderator
Falling interest rates
Am I being naive at having a sense of peace about interest rates? Whenever people are panicking about either falling interest rates and what it do to their wealth, I don’t even think about it, knowing that my PP is built for most scenarios much better than their standard bank accounts.
Re: Falling interest rates
When I adopted the HBPP back in 2013, one of the biggest objections I heard was "Don't buy 30 year T-bonds because interest rates have no place to go but up!' So much for following the consensus.
I also think that many investors, even some on this forum, do not have a clear grasp of the concept of bond convexity.
I also think that many investors, even some on this forum, do not have a clear grasp of the concept of bond convexity.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
Re: Falling interest rates
I thought you were going to say something about mortgage refinancing? I just checked rates today...they've nudged down a bit but not enough to be worthwhile. Will have to keep an eye on it though.
Portfolio-wise...I rebalanced in January and bought a pile of bonds that I was sure I was going to end up tax loss harvesting. Plus there's gold...anyone check their portfolio lately? If this keeps up we will be rebalancing into stocks. Deliciousness. Who's panicking???
Portfolio-wise...I rebalanced in January and bought a pile of bonds that I was sure I was going to end up tax loss harvesting. Plus there's gold...anyone check their portfolio lately? If this keeps up we will be rebalancing into stocks. Deliciousness. Who's panicking???
Re: Falling interest rates
Budd?
I too read (and thought about) all the concern on interest rates being so low when I started the PP (4 years ago now?). Yet here I am with 30% capital appreciation on my long bonds and getting 2.5-3% interest. It's worked out well.
Buying the lagging assets the past few years (largely gold and LTT) is working out favorably so far this year.