61–70 of 136 posts
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.
Bond rates are supposed to track the inflation rate so it's nice to see it functioning as intended
Idk 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…
I can’t really imagine a world in which the annualized yield of SPY over 10 years is less than 2.7%. And like I said before, rates are only going down and that’s not going to change anytime soon. Of course a financial advisor wouldn’t tell you to do it but they don’t really care about you in the first place.
Idk 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…
We've been on quite the bull run so in that regard I would say no, but given rates are super low and mortgage debt is cheap to come by (barely covers inflation), I honestly don't see why you wouldn't investigate it more. If you can make more than the mortgage interest rate, then it was worth it.
Using debt is fine is you can stomach a potential drop in a liquid market. That is more psychological than financial, actually. Would you panic sell if your (leveraged) investment drops 30 or 50%? I've come to realise I wouldn't hence I would consider making that investment, but to each their own.
This is less risky than using pure margin debt on your investments, because this can't be automatically liquidated.
It's worth noting that most people nowadays don't buy bonds directly, you would normally hold them through an ETF/index fund like BND or TLT. Yields typically drop when there's a flight to quality (i.e., people selling stocks to buy bonds). The upward pressure on bond prices drives yields down because people are willing to pay more for lower yields. Bonds are almost like a future of expected return on capital. If bon…
But if you did want to buy bonds, any citizen can setup an account at: https://treasurydirect.gov Also you can buy iBonds and TIPS, which are protected against inflation.
The bond market is far larger than the stock market. If you wanna know "what's going on" better become familiar with at least the basics of it (interest rates, how they relate to bond prices, spreads for risky credit, floating rate vs fixed rate, inflation protected securities, carry trades).
And it's not true that most bonds are held via ETFs (except by retail). There's a lot of trading going on at the institutional levels.
Earlier quoted context omitted.
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…
Why would you ever want to pay off your mortgage? Mortgages are the best and cheapest way to get debt. Considering the rate environment, the rate risk isn’t a big deal, IMO. Hell, I would even go a step further: dump that 200k into a levered S&P 500 (2x should be good). Unless the world falls apart, you’ll definitely be a millionaire in 10 years. And if you do 3x, maybe even 5 years (that’s some more risk though). I…
Earlier quoted context omitted.
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…
Why would you ever want to pay off your mortgage? Mortgages are the best and cheapest way to get debt. Considering the rate environment, the rate risk isn’t a big deal, IMO. Hell, I would even go a step further: dump that 200k into a levered S&P 500 (2x should be good). Unless the world falls apart, you’ll definitely be a millionaire in 10 years. And if you do 3x, maybe even 5 years (that’s some more risk though). I…
Seems your imagination is lacking. From 2000 to 2010 it was negative. I wonder if the current market is the only market you ever have seen. Housing prices also have collapsed not too long ago in the past.
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.
It's worth noting that most people nowadays don't buy bonds directly, you would normally hold them through an ETF/index fund like BND or TLT. Yields typically drop when there's a flight to quality (i.e., people selling stocks to buy bonds). The upward pressure on bond prices drives yields down because people are willing to pay more for lower yields. Bonds are almost like a future of expected return on capital. If bon…
I think US government is potentially the source for systemic risk that is realized within year or two.
Regulation and oversight is cut dramatically, SEC has been castrated, white-collar crime investigations are cut in DOJ. In addition the administration does everything it can to keep markets going up until the elections.
The change that large scale financial frauds and systemic risks can grow without being checked.
Bonds 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.