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30-year U.S. bond yields less than S&P dividend rate

bloomberg.com

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Re: 30-year U.S. bond yields less than S&P dividend rate

#91

Post by Ididntdothis »

smabie wrote: post #81
Ididntdothis wrote: post #67

Earlier quoted context omitted.

"I can’t really imagine a world in which the annualized yield of SPY over 10 years is less than 2.7%." 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.

You’re time period is very convenient, including two crashes and none of the recovery. That said, point taken.

Downturns in the market will kill you if you are leveraged. Once the money it's gone, it's gone and it will be hard to make it back. that is, unless you have a rich dad who gives you more money. That's why I think it's very important not to be naive with investment advice.

Re: 30-year U.S. bond yields less than S&P dividend rate

#92

Post by jotakami »

brenden2 wrote: post #23

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…

You’re not wrong, but government bonds actually have a somewhat different role in the modern financial system. Specifically, they are used as collateral in the interbank lending market, which means they have exchange value above and beyond the discounted cash flow of the bond itself. Which is basically how negative yielding bonds could even exist.

Re: 30-year U.S. bond yields less than S&P dividend rate

#93

Post by jotakami »

Der_Einzige wrote: post #78
brenden2 wrote: post #23

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…

Lmao the current market panic is not short term and is absolutely systemic. Supply chains have ground to a halt . Actually, it's easy to "time the market"... Just buy puts when everyone is panicking.

My retirement account is up 20% in two weeks from SPY puts and GLD calls

Re: 30-year U.S. bond yields less than S&P dividend rate

#94

Post by whatshisface »

exogan wrote: post #59
thinkloop wrote: post #27

Earlier quoted context omitted.

I don't think it broke any real records, the only one is the absolute point drop in the indexes, but that's a meaningless stat that will constantly be broken in the future as the economy grows - proportion is what's interesting.

My bad, it did not break records outside the 1987, dot-com and GCF crises, made a mistake there. However, I don't agree with the theory of infinite economy growth (as you said "constantly be broken in the future").

Future economy growth =/= infinite economy growth.

Re: 30-year U.S. bond yields less than S&P dividend rate

#95

Post by typpo »

acpacp wrote: post #45
thebrain wrote: post #36

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.

Well, at least you beat inflation

$500 CAD in 2000 would have to be ~$705 now in order to beat inflation, according to Statistics Canada - so his $8 return was not great. https://www.in2013dollars.com/canada/inflation/2000?amount=5...

Re: 30-year U.S. bond yields less than S&P dividend rate

#96

Post by nostromo »

leptoniscool wrote: post #4
mkagenius wrote: post #2

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?

The recent drop is not very significant (a little over 10%). The Great Financial Crisis caused a 60% drop around 2008/2009. https://www.nytimes.com/2020/02/27/business/what-is-a-stock-...

Financial crises tend to be much worse for securities than a regular recession.

Re: 30-year U.S. bond yields less than S&P dividend rate

#97

Post by nabla9 »

kenneth wrote: post #86
nabla9 wrote: post #69

Earlier quoted context omitted.

I agree with all you said. 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 gr…

The systemic risk is the global pandemic of proportions not seen since the Spanish flu or the black death. It's not about whether the DOJ is going after hedge fund managers. Viruses don't care about income inequality.

Pandemic is not systemic risk. Pandemic might trigger systemic risk. Pandemics, wars etc. are real world events that affect economy, not internal systemic instabilities in the financial markets.

Re: 30-year U.S. bond yields less than S&P dividend rate

#98

Post by kenneth »

jotakami wrote: post #93
Der_Einzige wrote: post #78

Earlier quoted context omitted.

Lmao the current market panic is not short term and is absolutely systemic. Supply chains have ground to a halt . Actually, it's easy to "time the market"... Just buy puts when everyone is panicking.

My retirement account is up 20% in two weeks from SPY puts and GLD calls

SPY puts (and some others) have been good to me. I'm up about 1000% in my public positions over the past couple weeks.

I'm letting it ride until my thesis on how bad this gets pays through. It's my hedge against my world getting significantly affected by the virus.

Re: 30-year U.S. bond yields less than S&P dividend rate

#99

Post by kenneth »

vikramkr wrote: post #88
Der_Einzige wrote: post #78

Earlier quoted context omitted.

Lmao the current market panic is not short term and is absolutely systemic. Supply chains have ground to a halt . Actually, it's easy to "time the market"... Just buy puts when everyone is panicking.

I'd hate to have had puts expiring on that day the markets rallied a couple days ago. Volatility goes both ways.

Not only did that happen to me, but Robinhood's outage (1) prevented me from selling in the morning when I tried to, and (2) didn't trigger the auto-sell 1h before market close on un-exercisable options.

Cost me $25k or so on top of the rally. Fuck Robinhood for this.

Re: 30-year U.S. bond yields less than S&P dividend rate

#100

Post by cocoa19 »

mkagenius wrote: post #2

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?

Meh, the price now is what it was in October of last year. Not really the greatest.

I did rebalance my portfolio a bit, but I'm sitting tight waiting for better opportunities.

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