U.S. Treasuries

  • 04 Jul
    Why Yesterday’s Retirement Investing Advice Won’t Work In Today’s Environment

    Why Yesterday’s Retirement Investing Advice Won’t Work In Today’s Environment

    • Common retirement investing advice worked ok in the past, but could have been much better.
    • Why would you sell stocks that you bought a long time ago, and that are still growing and paying dividend, to buy bonds that yield less than inflation?
    • Over the long term, little differences amount to a huge difference. Take responsibility for your retirement.

    Introduction

    The common advice on retirement investing is to be overweight stocks when you are far from retirement and then overweight bonds when you are closer to retirement. Some funds offer target date retirement funds that have such a portfolio allocation.

    Vanguard’s target retirement funds invest up to 90% in stocks when you are more than 25 years from retirement, and then lower that exposure to about 50% when you retire. 7 years into retirement, you have 70% of your portfolio in bonds. More →

  • 23 Mar
    Do You Have A Static Or Dynamic View Of The Markets?

    Do You Have A Static Or Dynamic View Of The Markets?

    • A static view tells us stocks are cheap. A dynamic view tells us hell is about to break loose.
    • Vehicle loans have increased 57% since 2010. If interest rates increase, car sales and other credit related sales will falter and lead the economy into a recession.
    • However, as always, there are ways to make money in any environment. Today we’ll discuss an actionable idea and introduce you to a profitable long term investing philosophy.

    Introduction

    This market has lost all connections to economic reality.

    The FED’s rate hike lowered treasury yields instead of pushing them higher. This is at odds with history as since 1954, the correlation between the federal funds rate and the yield on 10-year treasuries has been nearly perfectly correlated with a correlation ratio of 0.91, 1 being perfectly correlated. More →

  • 02 Feb
    It’s Time To Pay Attention To The Euro

    It’s Time To Pay Attention To The Euro

    • Currency movements can be easily explained through macro trends, but the timing isn’t that precise. However, long term investors can reach additional returns by following a few easy steps.
    • Cyclical currency patterns are natural, and under the influence of economic growth in the long term.
    • The dollar is approaching its peak and is ready to return to its historical mean.

    Introduction

    In last weekend’s Sunday Edition, Investiv Founder, Shane Rawlings, elaborated on how long term macro trends inflect exactly at the moment when there seems to be a general consensus that the trend will last for a long, long time.

    Nobody was buying stocks in 1981 because they thought high inflation would stay around forever. On the other hand, in the 1990s, people were convinced that the best investment was internet stocks. And in the 2000s, the conviction shifted to the real estate market as it seemed that the only way to go was up forever.

    Currently there is a strong conviction that the U.S. dollar is going to strengthen as interest rates rise and the U.S. economy grows, and while Europe continues with monetary easing. More →

  • 04 Dec
    Sunday Edition: A Debt Bomb Sure To Implode

    Sunday Edition: A Debt Bomb Sure To Implode

    The recent spike in interest rates over the last few months is a hot topic among financial news and media outlets. And it should be – it’s alarming.

    The rate on the 30-Year U.S. Treasury Bond shot up from 2.10% in early July to over 3% where it now sits. Many, including myself, are now calling for the end of the 35+ year bond bull market.

    I believe when we look back in 20 years, the 177’11 July high in bonds will mark the beginning of a new long-term bear market in bonds. More →

  • 17 Aug
    Are Safe Havens Really That Safe?

    Are Safe Havens Really That Safe?

    • Economic laws can’t be muted forever, and in the end always get their due, therefore it is good to look at other options to de-risk your portfolio.
    • Gold is too volatile to be considered a safe haven.
    • Diversification should be the best option to avoid losing everything in a market downturn.

    Introduction

    Economics is pretty straightforward. The first thing they teach you in ECON 101 is that the economy works in credit cycles. In a positive environment with low risks and low base interest rates, people borrow and spend. They buy a new car, go on trips, refurbish the kitchen and so on, which leads to economic expansion. More →