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TLTs value went down because yields went up. This is by design, anyone who invested in TLT at zero rates should have known the yields to price function. Honestl

TLTs value went down because yields went up. This is by design, anyone who invested in TLT at zero rates should have known the yields to price function. Honestly i dont see whats to hide here in reporting ?? Can you explain what am i missing here ?

toomuchtodo 4y ago
You’re not missing anything. If you invested in mid to long duration bonds right before the Fed started rocketing rates, you had a bad time.
- mnadkvlb 4y ago
  again, why would i put my money in bonds when the interest rates are rock bottom ? I invest in treasuries when interests are high or gonna stay high. If i see us hitting a recession in coming year, i keep mostly cash and start piling into treasuries over each hike cycle until at least the central banks start cutting rates and keep riding the treasuries till rates keep moving down. Or in other words, dont fight the fed
  - Octokiddie 4y ago
    You might not, but many banks and other institutions have no choice.
ivalm 4y ago
You’re right, but it is also the answer as to why the boring treasuries Silvergate held got devalued.
Octokiddie 4y ago
Many financial institutions are required by law to hold UST, some of which have suffered declines comparable to TLT. This was in part a result of regulations post-GFC. I'm surprised there hasn't been more reporting about this. Maybe everything's fine and there's nothing to see here.
- quickthrowman 4y ago
  If a bank classifies their long-duration Treasurys as held-to-maturity, they don’t need to mark the fluctuating value of the bond principal to market. [0] Also, most other banks aren’t overly concentrated in one area that could collapse and force a bunch of customer withdrawals like Silvergate was (in cryptocurrency) If there was a problem in banking bond holdings, it likely would’ve surfaced by now with the massive interest rate changes. [0] https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/loans_and_investment/loans_and_investment_US/chapter_3_accounting__1_US/34_accounting_for_de_US.html https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/loa...

toomuchtodo 4y ago

You’re not missing anything. If you invested in mid to long duration bonds right before the Fed started rocketing rates, you had a bad time.

mnadkvlb 4y ago
again, why would i put my money in bonds when the interest rates are rock bottom ? I invest in treasuries when interests are high or gonna stay high. If i see us hitting a recession in coming year, i keep mostly cash and start piling into treasuries over each hike cycle until at least the central banks start cutting rates and keep riding the treasuries till rates keep moving down. Or in other words, dont fight the fed
- Octokiddie 4y ago
  You might not, but many banks and other institutions have no choice.

ivalm 4y ago

You’re right, but it is also the answer as to why the boring treasuries Silvergate held got devalued.

Octokiddie 4y ago

Many financial institutions are required by law to hold UST, some of which have suffered declines comparable to TLT. This was in part a result of regulations post-GFC. I'm surprised there hasn't been more reporting about this. Maybe everything's fine and there's nothing to see here.

quickthrowman 4y ago
If a bank classifies their long-duration Treasurys as held-to-maturity, they don’t need to mark the fluctuating value of the bond principal to market. [0] Also, most other banks aren’t overly concentrated in one area that could collapse and force a bunch of customer withdrawals like Silvergate was (in cryptocurrency) If there was a problem in banking bond holdings, it likely would’ve surfaced by now with the massive interest rate changes. [0] https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/loans_and_investment/loans_and_investment_US/chapter_3_accounting__1_US/34_accounting_for_de_US.html https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/loa...