4 ms·
Along with a 50 year bull market in bonds where yields have dropped nearly every year (along with inflation).
by rr888 4y ago
Along with a 50 year bull market in bonds where yields have dropped nearly every year (along with inflation).
- FooBarBizBazz 4y agoIt's weird how most of the return from bonds comes not from yield but from capital appreciation [1], which happens because yields are dropping. There's something perverse and circular about it: "Make sure you buy your collectible widget today! It'll go up in value, because next year's widgets won't be as good! Prices only go up, because everything's downhill from here!" [1] Actually, is this literally true?
- rr888 4y agoyes it has been true the last 50 years, as market rates go down the existing bonds become more valuable. But it can't continue forever. https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart https://www.macrotrends.net/2016/10-year-treasury-bond-rate-...
- FooBarBizBazz 4y agoAbout [1]: I'm wrong. If you look at TLT in TradingView, adjusted for "dividends" vs. not, from 2003 to 2019 you see nominal gains of about 150% (with) vs. 40% (without). So most gain is from income. That's ignoring tax. Would also be good to compare to CPI to understand real returns. Or whatever other number seems to be a truer measure of inflation (house prices, for example).