20-year US Treasury bonds already broke an important level of support (red arrow) and yet again, the ETF finds itself at a crucial crossroads as rates continue to rise, punishing the long-end of the yield curve.
"We" have been taught (as a country) to think "bonds are safe," yet we can clearly see that these 20-year bonds, backed by the full faith of the U.S. Government, are getting curb stomped, losing almost -20% over the course of the last 18 months.
But are bonds "safe," really? It's a seriously problem in our industry - at least I think so...
For any investor with a "Balanced" (i.e. - 60/40) or worse yet, "Conservative" (40/60) portfolio model, how do you (as the investor) react to a portfolio that's losing money, not only because stocks are falling in value, but because bonds are getting taken to the cleaners as well?
Not to go out on a limb here, but I'm going to make the assumption that most of those on TradingView are a little more knowledgable than the average investor. Furthermore, I'd go so far as to say that most are probably avoiding the bond market like we avoided COVID-19 in March of 2020.
I won't make blanket advice here and say to that, "Well.... good, then!"
However, I WILL say that at our office, we've been underweighting bonds, overweighting stocks and commodities, and tweaking the target allocations a bit (to all our models) to make up for the possibility that we might be coming out of a 35-year bull market in bonds, as the pendulum swings toward higher long-term rates 3, 5, 10+ years from now.
While we don't own any 20-year Treasuries at our office, if you DO, I'd be looking at the horizontal line in the sand below current price, which could act as a potential level of support... but if broken, all bets are off.
"We" have been taught (as a country) to think "bonds are safe," yet we can clearly see that these 20-year bonds, backed by the full faith of the U.S. Government, are getting curb stomped, losing almost -20% over the course of the last 18 months.
But are bonds "safe," really? It's a seriously problem in our industry - at least I think so...
For any investor with a "Balanced" (i.e. - 60/40) or worse yet, "Conservative" (40/60) portfolio model, how do you (as the investor) react to a portfolio that's losing money, not only because stocks are falling in value, but because bonds are getting taken to the cleaners as well?
Not to go out on a limb here, but I'm going to make the assumption that most of those on TradingView are a little more knowledgable than the average investor. Furthermore, I'd go so far as to say that most are probably avoiding the bond market like we avoided COVID-19 in March of 2020.
I won't make blanket advice here and say to that, "Well.... good, then!"
However, I WILL say that at our office, we've been underweighting bonds, overweighting stocks and commodities, and tweaking the target allocations a bit (to all our models) to make up for the possibility that we might be coming out of a 35-year bull market in bonds, as the pendulum swings toward higher long-term rates 3, 5, 10+ years from now.
While we don't own any 20-year Treasuries at our office, if you DO, I'd be looking at the horizontal line in the sand below current price, which could act as a potential level of support... but if broken, all bets are off.
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