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Why I Can Hardly Wait For The Bond Bubble To Burst



June 24, 2013 – Comments (2) | RELATED TICKERS: NLY , HYS

OK, I am sick and tired of Treasury instruments that yield, pretty much, 0%, and this includes CDs and money market funds and...sigh.

Before Helicopter Ben took flight, about 1/3 of my portfolio was in fixed instruments: Vanguard junk bond fund (yielding around 9%), Treasury paper ETFs, and even the lowly savings acct for my “chicken money”. They all yielded a good % upon which to plan my too-soon-occurring retirement. Now that whats-his-jiggles is happily criss-crossing our country, my fixed instruments went straight into the toilet. Risky junk bonds were bid up to the point where they yielded what savings accounts used to be at.

Forced to find alternatives, I shifted my fixed instruments into high-dividend ETFs and mutual funds. I bought NLY (which is down 20%) and HYS (yield is 5% and duration is 1.9). This is driving me nuts.

I want the old days back.

I want to invest in fixed instruments that yield the same % as the old days, so I can again have a balanced portfolio that will safely take me into retirement. I want junk bond funds that yield 9%, and CDs that yield 4%. I want my money market funds to yield something other than 0%.

Yes, I know, there will be a bit of short term pain if this comes to pass, but it will be worth it. C'mon Helicopter Ben: throw caution to the winds and stomp firmly on the brakes. I dare you; I double dare you.

OK, I'll sit down and be quiet now. 

2 Comments – Post Your Own

#1) On June 25, 2013 at 1:08 AM, jiltin (26.92) wrote:

The right step is to move all volatile instruments (Stocks,Bonds and others) into cash (money market) until stability comes.

Agreesive people may short those (Risky) or move it to reverse funds(Risky).

I hope you know this.


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#2) On June 25, 2013 at 10:50 AM, L0RDZ (83.74) wrote:

Whats worse is  that  even  as  interest  rates  rise,  the banks  are too accustom  to  free  money  and  they will not  increase  the  rates  they  give  to  depositors.

Heaven  forbid  you  actually use  your  card  to withdraw  money and have  to  pay  4-5 dollars  to  get  at  your  money when  they pay  next to nothing in  interest.


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