mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 27, 2005
- Messages
- 6,206
I agree that in a depression long Treasury (not corporate) bonds would be best. What percentage of your portfolio do you have in long term bonds? I've read though haven't seen the data that long bonds have not compensated you for the risk and that intermediate bonds are therefore best. The reason is apparently that long bonds are used by insurance companies to match their obligations' duration so they accept lower yields to do so.
I've chosen to emphasize inflation risk over depression risk in our portfolio. So am using 10yr TIPS and short term bonds as per some suggestions from Larry Swedroe. Currently out of TIPS as they are much lower then the long term average for real rates on intermediate bonds of 2.3%.
intermediate term bonds have done better because we havent had the economic enviornment yet for long term bonds them to have their day in the sun. again we are talking long term bonds for portfolio protection not for income or performance in any other scenerio but deflation/depression