Understanding Intermediate Treasuries

[augam]

nearly 10% of my portfolio is in VFITX. Recently it has taken a sharp drop.

For those in the know what is driving down the return on these treasuries?

 

[bingybear]

I'm not really that well versed.... but you may be looking at the wrong aspect. IIRC there was some talk this week that treasuries froze. That is they could not line up buyers and sellers. Again IIRC the fed came in to provide liquidity. I really did not pay much attention to the treasuries I own... other things had my attention. I would have fared better if I just went out and played pickleball.

 

[teejayevans]

We’re in panic mode, I don’t think the market is being rational with the wild swings. I think you just need to wait for everyone to calm down.

 

[audreyh1]

nearly 10% of my portfolio is in VFITX. Recently it has taken a sharp drop.

For those in the know what is driving down the return on these treasuries?

Well that sharp drop is compared to just a few days ago. Treasuries went to extreme high levels on Monday, March 9, with 10 year rate dropping below 0.5% and a lot of it is normalizing back to levels seen after the Fed emergency rate cut on March 3rd.

So it was really more of a spike in treasuries than a drop.

 

[jim584672]

If the fund was pure Treasuries it should be up in price. Probably it has non-Treasury paper that is dropping.

 

[audreyh1]

If the fund was pure Treasuries it should be up in price. Probably it has non-Treasury paper that is dropping.

No, treasuries had a huge spike on Monday Mar 9 and came back down. Sure, it’s up YTD.

 

[RetireBy90]

Pundits are commenting on every asset class tanking last week. Where stocks down would normally mean bonds up in price, they say that people just selling everything in a panic with all assets down in prices. Sounds as good as any explanation to me. However I’m still trying to remain calm and enjoying the ride. At least lots to talk about other than politics or sex ;-)

 

[pb4uski]

Pundits are commenting on every asset class tanking last week. ...

My CDs held steady last week... in fact, they went up a smidgeon (3.33%/52= 0.06%)

 

[Markola]

Pundits are commenting on every asset class tanking last week. Where stocks down would normally mean bonds up in price, they say that people just selling everything in a panic with all assets down in prices. Sounds as good as any explanation to me. However I’m still trying to remain calm and enjoying the ride. At least lots to talk about other than politics or sex ;-)

There are periods of occasional panic like last week and in March 2009 when significant cattle in the herd seemingly sell “everything” and move to cash, driving down the prices of most asset classes. Such market timing is dumb in hindsight, but that’s what herds do. Things bottom out and then the herd engages in a “flight to safety”, aka more market timing, mostly into bonds, driving up their prices. For example, by the end of 2009, total bond index prices went UP nearly 14%. Eventually, the herd starts cautiously grazing on stocks again.