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Posts Tagged ‘buy and hold’

Low Rates Are Not Enough

September 27th, 2021 by Kurt L. Smith

For almost forty years interest rates have moved lower and for many of us we will forever regard today’s rates as low. This is nothing new. We have lived in a low interest rate environment now for many years.

Not content with relying solely on the economic drivers of low interest rates, the Federal Reserve has, at various times these past many years, decided it also needed to buy bonds. Evidently low rates are not enough.

Buying bonds might spur you or your brethren to also buy bonds. After all, bond prices can move upward just like other asset prices and in 2020 the prices for US Treasury notes and bonds soared.

Despite continued Federal Reserve bond buying, US Treasury notes and bonds climaxed in 2020. Investors know that down forty percent in price represents quite a climax. What happened Fed? Why aren’t investors continuing to buy US Treasury notes and bonds and following your lead?

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A Buy and Hold World

May 5th, 2017 by Kurt L. Smith

The municipal bond market is not so much of a market as it is a distribution scheme. Each week new issues of municipal bonds are sold, or distributed, to buyers looking for bonds like these offered. The bonds may disappear immediately or usually they are all distributed to buyers over several weeks.

The end result is the bonds are distributed. We can’t control whether or not any bonds are later offered or enter the marketplace. Last month I wrote that it only takes one: one bond coming back into the marketplace that may prove to be worthwhile for us.

This means the bulk of all municipal bonds are bought and held. With long-term bond yields trending down for thirty-plus years (and prices trending higher), a buy and hold strategy has been a winning strategy.

Yet somehow, someway, bonds come into the marketplace each and every day in an attempt to be redistributed. Thankfully not every bond holder buy and holds, so at least we get an opportunity to see if the bonds they are selling are worth buying. (more…)

We Live In Interesting Times

September 1st, 2015 by Kurt L. Smith

While waiting for the next move higher in long-term interest rates, the Dow decided to shed 1000+ points.  And that was only in the first eight trading days following the publication of the August Letter. (more…)

NEWS FEED

The $247 trillion global debt bomb washingtonpost.com/opinions/the-2…