The beginning of the banking and commercial real estate crisis this year has many parallels to the start of the residential real estate crisis in 2007.
There will be a large drawdown and an extended low/negative return period to balance out the above average return of the last 12 years.
A technical indicator with a reliable history is signaling that 30-year Treasury yields will soon decline.
It isn't over and financial markets don't accept that yet. I realize suggesting anything negative about the virus is misanthropic, but the truth matters and the optics are misleading.
The economic effects from COVID-19 will be devastating. Stock and asset prices will fall dramatically and will take years to recover. U.S. Treasury yields will turn negative. Sell “risk-on” assets, increase cash, and buy Treasury bonds.
Good economic news over the last couple months belies the fact that a recession could strike as soon as March 2020.
It isn’t just how much the Fed cuts rates that matters; it is how soon they do it.
The bull market in U.S. Treasury bonds is in full swing and there is plenty more return to be made.
The business cycle has progressed to the point where the front end will outperform the long end of the yield curve.
In my previous article, I discussed how the U.S. Treasury yield curve foretells an imminent bull market in U.S. Treasury bonds. This article corroborates those findings from the perspective of the housing market.
With the economic expansion nine months from being the longest in U.S. history, the yield curve nearly flat and housing market indicators peaking earlier this year, it doesn’t take much imagination to see what’s next: a recession and falling interest rate cycle – i.e., a U.S. Treasury bull market. This article studies the history of these cycles and offers a roadmap for the upcoming one.
In my prior article, I showed why leveraged U.S. Treasury bonds make sense as an ordinary investment – one that rivals the returns of equities but with smaller drawdowns. This article converts theory into practice using the universally accessible futures market, without borrowing money.
For three important reasons, leveraged U.S. Treasury bonds make sense as an ordinary investment.
This article compares the performance of the premier investment-grade bond index, the AGG, to the performance of its subset U.S. Treasury index. Surprisingly, the long-term performance of the Treasury index is nearly that of the AGG, and outperformed it in several crucial periods.