A weekly thread to discuss financial matters - from personal all the way up to global.
Ground Rules
- Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
- Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
- Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
- Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
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Notes -
Yeah, that's a good argument for 30 year treasuries.
Here's another one. Rates aren't going to 8%. They're just not. Because the government will go bankrupt in short order. So the Treasury and the Fed will find a way to fix it just like they "fixed" Covid by printing $10 trillion in helicopter money.
So, we might be in a similar situation to 2020, just opposite.
Back then, only a moron would buy treasuries because rates were near zero. It was impossible for them to go lower.
Today, it may be impossible for rates to get much higher. Gilts will be one to watch since British debt is already trading higher than US debt (their 30 year is approaching 6%) and the UK has a bad economy, bad politics, and horror show demographics. Will be interesting to see when they crack and what happens.
Here's a TIP for you. Take a look at TIPS (Treasury Inflation Protected Securities). You can lock in a yield of 3% + inflation for 30 years. So when the government prints you'll be protected, modulo how much you trust the CPI to be accurate.
Despite all this, I own almost no bonds because the stock market is a better opportunity, IMO.
High TIPs spread is one reason I’m recommending owning bonds is ok.
Fundamentally I’m a mean reversion guy. I’ve always traded that way. The trick with having that trading personality is I guess having a fundamental understanding and being right more times than wrong that it’s value. And my gut is rates are value here and not fucked. And duration can offer significant upside.
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