The New 60/40 - Web page 2

betablocker wrote: ↑Tue Sep 17, 2024 7:46 pm

zie wrote: ↑Solar Sep 15, 2024 3:10 pm

betablocker wrote: ↑Solar Sep 15, 2024 2:48 pm

FoundingFather wrote: ↑Fri Sep 13, 2024 9:48 pm

betablocker wrote: ↑Tue Sep 10, 2024 2:28 pm
As a result of the bond bull marketplace for the final 40 years has ended.

It appears to me that we disagree on this fundamental premise. Why do you assume bonds are a foul deal proper now? As others have identified, bonds are much more enticing now than they had been just a few years in the past, if you’re into that market timing factor…

I purchased among the 30 yr TIPS not too long ago at 2.3% actual yield. Until I actually misunderstand bonds, why ought to 2.3% actual yield make me nervous?

Founding Father

If inflation goes again up, Treasuries go down. In addition they are likely to correlate with equities. I wouldn’t say that individuals shouldn’t personal treasuries simply that they aren’t an ideal hedge and there are others traders ought to have a look at together with of their portfolios. TIPS make some sense to me however they’re an odd instrument and CPI isn’t essentially the most dependable inflation gage. However that’s simply my opinion.

Solely the NAV goes down, you get the identical money return in your pocket that you simply had been initially promised although. If @ purchase time you had been promised $10k/yr in bond coupon funds, you’ll nonetheless get that $10k/yr in bond coupon funds, even when the NAV craters 20%. You purchase bonds for his or her *cashflow*, not for his or her NAV.

Additionally, many individuals purchase LTT’s particularly as a result of for lengthy durations of time, they aren’t very correlated with equities.

I’d kindly counsel re-examining your understanding of bonds after which come again and re-evaluate your place.

It’s true that the money flows are assured however that solely issues for legal responsibility matching on fastened bills. Virtually all folks should pay for issues which might be topic to inflation so I’d kindly counsel you reexamine your understanding.

Inflation is certainly an issue typically. One some authorities bonds even have an answer for, not like all different attainable investments. So I do not perceive your level in any respect. Do you not know that some governments(The US and EU particularly) provide inflation protected bonds?

Lengthy Time period Treasuries(LTT) solely typically correlate with equities. There are lengthy durations of time when they don’t correlate very effectively in any respect. There are many portfolios betting that the non-correlation continues, even right here on this discussion board. Teachers, final I checked, are nonetheless pondering what makes LTT’s typically correlate and typically not. Final I heard they assume it may need one thing to do with inflation, so maybe LTT’s will correlate with equities once more, since Inflation got here again.

I do not know why you assume the elemental level of bonds (their promised money move) is simply vital when legal responsibility matching on fastened bills? That makes zero sense, since 1) it is their basic purpose for present and a couple of) Inflation protected bonds exist.