Quote:
Originally Posted by MKSixer
Thoughts on the current bond yields? I'm tempted on the 2-year note.
|
If you're going to hold them for the duration, putting some money into Treasuries is a safe way to not lose quite so much to inflation while taking zero risk and waiting for the dust to settle. Rates may go up more, though, and if they do and you have to sell you'll likely lose a little of the capital. But rates aren't likely going to go up that much more so you're not going to get shellacked like those of us holding bonds in January. And if the market turns up it's likely because rates are down and then you'll be able to sell for a small profit and put the money back into stocks if you'd like.
But, you will be losing money. Inflation isn't likely going to be below 4% anytime during those two years (IMHO), so if you do hold them you're pretty much guaranteed to lose money. Could you lose more in stocks? Maybe. History says that they (and other hard assets) are the only way to beat inflation in the long run, though. And it would be very unusual to see the market down two years from now, based on how much it's already declined. Could happen, of course, but that's a place I don't personally want to go in my head. Too scary.
