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birb_cromble  2d ago (text post)   391 thread views

Weekly Finance Thread - 2026-08-01

A weekly thread to discuss financial matters - from personal all the way up to global.

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Treasury bonds have significant duration risk.

Sorry can you explain this a bit more?

Treasury bonds have maturities of 20-30 years. Cash flows further out in time are more sensitive to interest rate changes. For example, VLGSX has an average maturity of about 22 years and an average duration of about 14 years. A 1% fall (rise) in interest rates would mean about a 14% rise (fall) in the price of VLGSX.

You can get 3 month treasure bonds....

Those are generally referred to as Treasury bills. Absent additional qualifiers, bills, notes, and bonds usually refer to Treasuries with maturities of <= 1 year, >1 year to 10-years, and 20 to 30 years, respectively.

Ahhh okay thanks for the terminology clarification!

Not sure if it's the same problem as what Sloot's saying, but as someone who has to fight the 'just leave it in a savings account' instinct myself, there's a lot of fear about unpredictable expenses occurring in a way that your net worth could easily cover them, but your bank account can't, and either can't be converted into cash at all (eg, tech worker stock in companies they can't sell, ) or can only be converted at a massive cost or time investment (eg, bonds sales on secondary market, where tax ramifications become huge).

That’s why I would suggest a bond fund: it’s liquid in a way that individual bonds are not and has a pretty comparable yield. Yes you need to sell it but credit should be able to tide you over if it’s truly urgent

That’s why I would suggest a bond: it’s liquid in a way that individual bonds are not

Do you mean a bond fund?

Yes, corrected.

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