Tag: treasuries

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Fed Enacts Emergency Rate Cut. New Record Lows on Treasuries

This morning at about 9 AM central, in response to the Coronavirus, the Federal Reserve announced an emergency 0.50% rate cut.

The initial response by the market was to send stocks and gold soaring. As the day wore on U.S. stocks crumbled losing about 3.5% at one point and ending the day down 2.8% while gold hung on for a 3%+ gain.

The 10-year Treasury yield continued to slide throughout the day (sending bond prices up) and even got below 1% for the first time ever! Think about that…in the almost-250 years of this great Republic we’ve just set a record low on bond yields. Continue reading “Fed Enacts Emergency Rate Cut. New Record Lows on Treasuries”

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Too Early for a Victory Lap, but…

I’d like to review my comments on bonds over the last couple years. The financial media, and retail investors along with their advisors, tend to focus a lot on stocks as stock markets are perceived as “sexier” while the bond markets often receive the cold shoulder.

Honestly, this is largely the reason that bond and credit markets are “smarter” than the stock markets. After all, how many retail investors do you know that open a brokerage account so they can trade bonds? Almost none (I’ve never known a single retail investor to do this actually).

In other words, there’s a lot more retail money “investing” in the stock markets than in the bond markets.

With that being said, let me summarize some comments I’ve made regarding the bond markets over the last couple years and include a chart to see how those comments have stacked up. Continue reading “Too Early for a Victory Lap, but…”

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Bull Case and Bear Case for Investing in Treasury Bonds Right Now

Today, I wanted to provide two opposing views of the merits of investing in U.S. Treasuries in today’s environment.

Whenever I make investment decisions for clients, I always try to consider arguments both in favor and against the investment. It’s important to understand both sides of any issue and do our best to remove our own personal biases and emotions from the decision. In this particular case, with regards to U.S. Treasuries, both sides of the argument contain valid points causing stark disagreement among even the most respected managers and pundits. Continue reading “Bull Case and Bear Case for Investing in Treasury Bonds Right Now”

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Bond and Stock Behavior Throughout History

I think it’s important for investors to understand the historical behavior of the investments they hold in their portfolios. This understanding helps investors maintain realistic expectations of their investments going forward (both good and bad), invest more appropriately, and remain disciplined through up and down years. “Remaining disciplined” means not chasing returns in good years while not fleeing your strategy in bad years. Continue reading “Bond and Stock Behavior Throughout History”