Treasury Yield Curve Collapses At Fastest Pace In 7 Years

[murphy_p_t]

What is the significance of this for bond investors / speculators?

Of course, as part of PP, I expect its insignificant.

http://www.zerohedge.com/news/2014-04-2 ... ce-7-years

[MachineGhost]

What is the significance of this for bond investors / speculators?

Of course, as part of PP, I expect its insignificant.

http://www.zerohedge.com/news/2014-04-2 ... ce-7-years

Recession.  And an inverted yield curve is one of the Achille's Heels of the PP, so it is NOT insignificant.

Boy, the hubris and contentment of the PP lately is getting sickening.  It's been losing ground for 3 years, yet you're all eternal believers.

[bluedog]

MG,

Curious...what are your thoughts on asset allocation then?

Thx,
Bluedog

[MachineGhost]

MG,

Curious...what are your thoughts on asset allocation then?

Thx,
Bluedog

I wish I had a better answer for you, but I don't think we will know until we actually suffer through it and then we can look back and see what would have mitigated the damage, if at all.  But certainly a higher percentage to cash would weather a Tight Money / Inverted Yield Curve condition better than anything else.

[rickb]

MG,

Curious...what are your thoughts on asset allocation then?

Thx,
Bluedog

I wish I had a better answer for you, but I don't think we will know until we actually suffer through it and then we can look back and see what would have mitigated the damage, if at all.  But certainly a higher percentage to cash would weather a Tight Money / Inverted Yield Curve condition better than anything else.

This thread from last year might be worth reviewing:

http://gyroscopicinvesting.com/forum/pe ... servation/

[AdamA]

It's been losing ground for 3 years, yet you're all eternal believers.

2011 10.5%
2012  6.8%
2013 -3.5%

How's it been losing ground for 3 years?

[ns3]

It's been losing ground for 3 years, yet you're all eternal believers.

2011 10.5%
2012  6.8%
2013 -3.5%

How's it been losing ground for 3 years?

I'm still a believer but your figures don't dispute the accuracy of MG's observation. Looks like losing ground for 3 years to me.

[MachineGhost]

I guess its a matter of perspective.  The PP has been underwater for 1.5 years not 3 (that is the Max Yield version I think), even if its not been losing 1.5 years in a row.  I was firmly thinking of the equity curve, not the yearly returns.  I ran an updated backtest:

[img width=825 height=825]http://i62.tinypic.com/rc0fpd.png[/img]

[img width=825 height=825]http://i62.tinypic.com/2nhg6qb.png[/img]