I recently cashed out a Canada Savings Bond I had from when I was a kid and I after taking into account inflation I made about $8 while the government had my money for 20+ years.
How much did the bond cost?
30-year U.S. bond yields less than S&P dividend rate
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Re: 30-year U.S. bond yields less than S&P dividend rate
#42I backed the truck up in 2018 for Fidelity Treasury Bond Index Fund. Most of of my 401K is in it. It's up 31% in the last year. With almost no management fee. That's all.
Re: 30-year U.S. bond yields less than S&P dividend rate
#43Idk if this belongs at HN but if it does, then isn't this the greatest opportunity post 2008 crash to invest in to the markets?
I'm in an interesting position related to this. In Canada, most people lock into their mortgage rate for 3-5 years. After that, you've got to renegotiate a rate but you're also free to switch banks. It's like starting over again at whatever you currently owe. I locked into mine 4 and a half years ago, so renewal is coming up this summer. Meanwhile, my home's value has skyrocketed (thanks to an insane Toronto housing…
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Re: 30-year U.S. bond yields less than S&P dividend rate
#44I recently cashed out a Canada Savings Bond I had from when I was a kid and I after taking into account inflation I made about $8 while the government had my money for 20+ years.
Bond rates are supposed to track the inflation rate so it's nice to see it functioning as intended
Re: 30-year U.S. bond yields less than S&P dividend rate
#45I recently cashed out a Canada Savings Bond I had from when I was a kid and I after taking into account inflation I made about $8 while the government had my money for 20+ years.
Well, at least you beat inflation
Re: 30-year U.S. bond yields less than S&P dividend rate
#46Idk if this belongs at HN but if it does, then isn't this the greatest opportunity post 2008 crash to invest in to the markets?
One way to look at is, when did we last see prices like this?
If this is a good opportunity then it's only slightly better than October of last year when the prices were about the same. (Slightly better because in theory, you could have done something else with the money in the meantime.) It's not better than any time before that, when prices were lower.
Stocks are on sale, but it's hard to beat time in the market, which is still better for most timespans.
Re: 30-year U.S. bond yields less than S&P dividend rate
#47Bonds are a commited fixed return, which means the value of bond goes up if the going rate for new bonds goes down. Thus bonds can be much more profitable than stocks when the marketing is going down. The central bank will drop rates, and thus any holder of existing bonds gets to sell their old bonds for more, maybe much more. Of course this is not the big driver for bond demand. Rather bonds are demanded by money ma…
This doesn't explain why rates change. The delta can only ever be explained by people choosing to buy bonds instead of what they previously owned, or vice versa. Those people are definitely not trying never to lose any money at any cost, or they'd have bonds all the time and rates would never change.
Rates and prices reflect confidence in the future - essentially faith in the system.
Re: 30-year U.S. bond yields less than S&P dividend rate
#48Idk if this belongs at HN but if it does, then isn't this the greatest opportunity post 2008 crash to invest in to the markets?
No, this isn't a crash, the main US indices are just back to where they were 6 months ago. That isn't a great buying opportunity, they weren't cheap 6 months ago either.
Re: 30-year U.S. bond yields less than S&P dividend rate
#49I'm about to start investing with lump sum next week since stocks looks cheaper. I was thinking to go with 80% SWDA (global stocks [1]) and 20% AGGU (global bonds[2]). I'm a non US resident. - Should I consider to take less bonds? - Is lump sum a good idea, or should I DCA? [1] https://www.ishares.com/uk/individual/en/products/251882/ish... [2] https://www.ishares.com/uk/individual/en/products/291772/ish...
I would consider dropping the bonds unless you are going with junk bonds. The yield on high-grade bonds is trash and not worth it. In fact, the only reason anyone buys that shit is: a) they are legally required to b) they don’t care about making money, just not losing it. Instead, I would consider adding metals (or just gold) as your 20% uncorrelated asset.
The way my portfolio currently looks as of today (it changes a lot) is 50% gold and 50% 3x levered S&P 500 etf. This effectively gives me 1.5x market exposure plus an uncorrelated asset that both boosts my returns and cuts my volatility. When I feel like this whole coronavirus thing is over I’ll probably increase the 3x market exposure.
Re: 30-year U.S. bond yields less than S&P dividend rate
#50Is there a ELI5 about this somewhere?
Sure, what’s the question?