Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
The peak is steep on both sides...TLT's price has "appreciated" significantly as LT government bond continue to find their interest rate bottom. Here's how TLT has performed (numbers represent % gains or losses) since 2005:
Investors will move beyond the worry of intermittent hits that raising interest rates will have on their bond's performance and remember that bond's serve other more important purposes.
Hasenstab comment:
"That's why one of our core trades is short US Treasuries."
Sounds an awful lot like Bill Gross's comments years ago prior to QE1 regarding his call on LT Government bond.
When these bond articles surface I like to revisit Wealthtrack's interviews (there have been at least two) with Robert Kessler:
My take on Bonds (I call it Debt): I worry more about the inappropriate use of private and public borrowing when rates are low. Debt is best used to finance growth, but low interest rates often encourage inappropriate use of debt. Bad debt mask insolvency, skews balance sheets and pushes the day of reckoning further down the road. Insolvent corporations often hurt shareholders who are left holding the "debt bag". Insolvent governments bury their citizens with debt repayments (taxes) that harm incomes and economic growth.
Comments
I enjoyed reading Hasenstab's take. I use to own his fund but sold the position out a few years back and chose to keep PGBAX over it.
Old_Skeet
Investors will move beyond the worry of intermittent hits that raising interest rates will have on their bond's performance and remember that bond's serve other more important purposes.
Hasenstab comment:
"That's why one of our core trades is short US Treasuries."
Sounds an awful lot like Bill Gross's comments years ago prior to QE1 regarding his call on LT Government bond.
When these bond articles surface I like to revisit Wealthtrack's interviews (there have been at least two) with Robert Kessler:
ROBERT KESSLER – IN DEFENSE OF BONDS
My take on Bonds (I call it Debt):
I worry more about the inappropriate use of private and public borrowing when rates are low. Debt is best used to finance growth, but low interest rates often encourage inappropriate use of debt. Bad debt mask insolvency, skews balance sheets and pushes the day of reckoning further down the road. Insolvent corporations often hurt shareholders who are left holding the "debt bag". Insolvent governments bury their citizens with debt repayments (taxes) that harm incomes and economic growth.