Subject: Re: Bond Investing, a Brief Intro
dillbeans,


As always, planning what to do about where or how to deploy money isn't simple or obvious, because there are multiple factors at play. But if you want/need a guide, then watch some of Jim Rickards videos or read his books. Summarizing hugely, he says we're in a recession/depression that's going to take many years to play out, nor will there be any "getting back to normal". That world is gone.

As for the bond stuff, the 13-week isn't a bad one to ladder. If you have the cash, the 26-week will pay a bit better. In either case, the time table seems to be this. The Fed will hike another 25 bps in March and again in June and then pause, maybe as long as until mid '24, and then start cutting, at which time bonds of longer duration will be the place to be, not on the short end of the yield-curve.

The economic fiction that is the CPI printed today, showing that inflation is still on the rise. If the 1980 version is used, tracked by Shadow Stats, then the real rate is twice that of the reported number, as everyone of us knows who's been to the grocery store lately. That means that, no matter how good present bond yields seem to be, they are offering a negative rate of return, which is by design, as it has been since about 1913, because inflation allows gov'ts to borrow and spend.

An aside: Buying through Treasury Direct is easy and convenient. But the bonds can't easily be sold. They have to first be transferred to a brokerage account. But most brokers will buy at auction for you without commish. For now, rolling ladders thru Treasury doesn't create any problems. But eventually, you're going to want to switch to buying in your brokerage account(s), especially as you extend maturities.

Charlie