3 ms·

> My wife and I have been holding Treasury bills for the past few years waiting for mortgage rates or home prices to come down, but neither have. So, we keep ro

> My wife and I have been holding Treasury bills for the past few years waiting for mortgage rates or home prices to come down, but neither have. So, we keep rolling Treasuries until the right moment arrives. Ouch. Holding T-bills instead of equities for the last few years has been incredibly costly for this couple.

bluGill 1y ago
What you are not wrong, this is misleading. We can say on hindsight what happened, but there is no way to know in advance it would have happened that way. There have been many times when equities have done very poorly for a short period of time. Any money you plan to spend in the near future should not be in equities, it should be in lower return investments like treasury bills, money market funds, or other similar investments that while they don't offer as good a return on investment also don't suddenly crash losing significant value for a few years. Their real mistake was thinking the housing market would crash, which while not impossible seemed unlikely to most observers.
- tossandthrow 1y ago
  The housing market has crashed 2 times within the past ~30 years (90 and 2007). Housing is so over financialized + demographic shifts that it might be merited to expect crashes. Regardless, one should not hold cash in anticipation of a housing crash but in the anticipation of a buying opportunity.
  - rkomorn 1y ago
    > Regardless, one should not hold cash in anticipation of a housing crash but in the anticipation of a buying opportunity. Isn't the housing crash in question also the buying opportunity in question, for many people who have been priced out of the market? Edit: I'm not implying this is a sound strategy. Just more of a reality.
    - tossandthrow 1y ago
      No, there are plenty buying opportunities without crashes. A buying opportunity can arise in multiple ways: Eg. realizing that you are willing to move to a cheaper area. There is plenty of well priced housing - just not on the soil people want it to be on. But in the end, not everyone can have the same address.
ryandrake 1y ago
It didn't sound like OP was holding Treasuries exclusively, but perhaps just as part of their overall portfolio. It's useful to keep a bunch of "dry powder" in cash or cash equivalents in case opportunities arise.

bluGill 1y ago

What you are not wrong, this is misleading. We can say on hindsight what happened, but there is no way to know in advance it would have happened that way. There have been many times when equities have done very poorly for a short period of time. Any money you plan to spend in the near future should not be in equities, it should be in lower return investments like treasury bills, money market funds, or other similar investments that while they don't offer as good a return on investment also don't suddenly crash losing significant value for a few years. Their real mistake was thinking the housing market would crash, which while not impossible seemed unlikely to most observers.

tossandthrow 1y ago
The housing market has crashed 2 times within the past ~30 years (90 and 2007). Housing is so over financialized + demographic shifts that it might be merited to expect crashes. Regardless, one should not hold cash in anticipation of a housing crash but in the anticipation of a buying opportunity.
- rkomorn 1y ago
  > Regardless, one should not hold cash in anticipation of a housing crash but in the anticipation of a buying opportunity. Isn't the housing crash in question also the buying opportunity in question, for many people who have been priced out of the market? Edit: I'm not implying this is a sound strategy. Just more of a reality.
  - tossandthrow 1y ago
    No, there are plenty buying opportunities without crashes. A buying opportunity can arise in multiple ways: Eg. realizing that you are willing to move to a cheaper area. There is plenty of well priced housing - just not on the soil people want it to be on. But in the end, not everyone can have the same address.

ryandrake 1y ago

It didn't sound like OP was holding Treasuries exclusively, but perhaps just as part of their overall portfolio. It's useful to keep a bunch of "dry powder" in cash or cash equivalents in case opportunities arise.