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Predicting US Treasury Returns - a tactical bond approach
Posted: Fri Apr 28, 2023 10:07 am
by ochotona
https://allocatesmartly.com/predicting- ... y-returns/
This seems to solve the "what if long bond interest rates keep going up from here?"
It trades once a month between IEF and T-Bills. Sometimes it's very cashy, sometimes it's very bondy.
It's down like -2% from Aug 2020... B&H IEF is -16%
Similar CAGR, you don't give up everything, except you have to trade it monthly. It doesn't look like the trades are big. This month, 4% change. Little steps.
Re: Predicting US Treasury Returns - a tactical bond approach
Posted: Fri Apr 28, 2023 3:43 pm
by yankees60
ochotona wrote: ↑Fri Apr 28, 2023 10:07 am
https://allocatesmartly.com/predicting- ... y-returns/
This seems to solve the "what if long bond interest rates keep going up from here?"
It trades once a month between IEF and T-Bills. Sometimes it's very cashy, sometimes it's very bondy.
It's down like -2% from Aug 2020... B&H IEF is -16%
Similar CAGR, you don't give up everything, except you have to trade it monthly. It doesn't look like the trades are big. This month, 4% change. Little steps.
B&H = Buy and Hold?
IEF = ?
Re: Predicting US Treasury Returns - a tactical bond approach
Posted: Fri Apr 28, 2023 5:51 pm
by D1984
yankees60 wrote: ↑Fri Apr 28, 2023 3:43 pm
ochotona wrote: ↑Fri Apr 28, 2023 10:07 am
https://allocatesmartly.com/predicting- ... y-returns/
This seems to solve the "what if long bond interest rates keep going up from here?"
It trades once a month between IEF and T-Bills. Sometimes it's very cashy, sometimes it's very bondy.
It's down like -2% from Aug 2020... B&H IEF is -16%
Similar CAGR, you don't give up everything, except you have to trade it monthly. It doesn't look like the trades are big. This month, 4% change. Little steps.
B&H = Buy and Hold?
IEF = ?
IEF = The iShares 7-10 Year Treasury Bond ETF (the ticker symbol of it is IEF). Basically a fairly close--albeit with somewhat less maturity and duration--proxy for the 10-year Treasury Bond for those who would rather buy an ETF than directly own Treasuries.
Re: Predicting US Treasury Returns - a tactical bond approach
Posted: Fri Apr 28, 2023 7:48 pm
by ochotona
Yes, B&H you got right. IEF is the 7-10 year US Treasury ETF. Some HBPP users like to use IEF instead of Cash + TLT... the one ETF "bullet". The point I'm making in this post is this Predicting US Treasury Returns is a bullet that doesn't misbehave in a rising interest rate environment.
I did some modeling, if you use 40% of this for fixed income, and 40% to a tactical equity scheme like Antonacci GEM, and 20% to fixed physical gold, you get a high return, low volatility portfolio that doesn't trade that often.
CAGR 10%, worst drawdown 10%. A full 1% more return than Golden Butterfly.