5 ms·
Well, bonds should be OK. CDs, Treasuries, etc
by supportengineer 11mo ago
Well, bonds should be OK. CDs, Treasuries, etc
- nickff 11mo agoThis used to be the case, but bonds have been positively correlated with stocks in recent years, so they have not been an effective hedge. Additionally, it seems possible/likely that we are headed into the long-predicted COVID stagflation, where growth is slow, so interest rates are low, but inflation remains high, which makes bonds unappealing.
- barchar 11mo agoCDs (and I-bonds) are very different instruments than bonds. If "bad things" happen and rates go down the CD will not appreciate in value like the bond will.
- donavanm 11mo agoBad news, 60/40 isnt a diversification strategy the last few years. 1) positive correlation in equity and fixed income 2) US treasuries/dollars have not had a “flight to safety” bump when volatility/l or bad news happens recently 3) treasuring moving to “all” short term debt, short term rate cuts resulting in long term rate increases.