I put 20% of my pension into bond ETFs before the US CPI data release. They went up 1% whilst the S&P dropped 5%. Also, got in just before distribution date. Glad I watched this video.
This 77yrs old investor advises.... Use pound cost averaging, ignore rises and falls, let the dividends roll up, avoid high commission charges like the Covid, buy funds only, unless you have insider knowledge. Finally, mix equity funds, bond funds, commodity funds. Do not trust newspaper 'experts'.
Listened to this great video again. Decided to buy a one month T Bill directly. The payout is reasonable and I can repeat for as long as the rate stays decent.
Thanks for the video. I'd be curious to hear a 6 month update (or maybe you've made one but I couldnt' find it?). Did you keep your bonds? TLT seems to bottomed in November and would have been another whopping 20% drop...almost 30% for 2022!
Thanks for a great video! Question: Why do people or institutions invest in long government bonds in times when the yield is very low? Which means that the price of the bond is very high. And if the interest rate rises, the price of the bond falls. It's more likely that the yield/interest rate will increase over time and lower the bond's value. So, what is the incentive to invest in times like this? For example, if banks invest in long term government bonds with low yield that will lead to a mismatch in duration between borrowing and lending. And How can banks hedge against higher interest rates without selling their long-term government bonds and make a loss? We have seen recent example of this regarding SVB, Silicon Valley Bank and Signature bank.
I'm on the opposite side of the fence to you, still holding TLT shorts because:, 1. Inflation is sticky (low supply due to supply disruptions in many sectors i.e food, energy, chip shortages, labour, china lockdowns etc, and employment and wage growth, fiscal policy causing high demand) which could mean need for much high nominal rates if Fed is serious about reducing inflation to 2%. I don't think the inflation readings will start to come down for some time, and rates could rise significantly in every FOMC meeting. 2. The FED isn't buying bonds anymore. Can private investors really sustain similar price levels to when the FED was an active participant in the bond market? There's much less liquidity now.
@@bspiderm yeah I sold the TLT shorts maybe 1 month ago? At 114 Honestly despite that comment Ramin kind of spooked me with this video 🤣🤣 I bought the put options at 144 around April time so they did well. Not all good news though, also had some SPY put options which are not exactly printing right now haha. Expire in December though
A few questions. I see you buy a bond through an ETF fund. Is there a way to buy the bond directly, so you hold the rights to the bond itself? For instance. I want to buy a three-year bond worth $10,000 which yields 3%. I intend to keep this bond for three years. So I collect the yield each year and get my $10,000 back after 3 years. How does this work in ETF fund? You have management fees and I suppose since ETF funds are trading bonds, its value goes up and down as does the yield. Is the yield in ETF bond fund variable then, you get different returns on your initial investment depending on the bond price? And, if after three years you find yourself in time when bond is 20% down you only get $8,000 back after the bond matures? Wouldn’t then be better to bypass the ETF fund, and hold on to the bond itself? What am I missing here?
Its very hard to own Gilt's directly because there isn't much of a secondary market for them. You're going to struggle to find someone to sell you £10,000 worth of gilts for example. They tend to be transacted in much larger quantities and they're not usually accessible to retail investors like us.
Title of this video is wrong. You are buying bond etf not bonds. There is a difference between these two. Bond etf has nothing to do with fixed income and can fluctuate a lot (depending on duration). We've had unpleasant example of this fluctuation recently. Buying actual bonds directly is a fixed, guaranteed income investment but good luck in getting those if you are a retail investor based in UK.
I’ve been putting 10% of my monthly investment into bonds since January. Currently they have the highest return to date the US interest rate increases have sent them upwards. I’ll start selling out when interest takes first cut. Return sitting at 9.69%.
Hi Ramin, thank you for a lot of great content - very educative. Can you explain difference between buying bonds using ETFs (e.g. some vanguard ones like VGOV) and buying bonds directly from government. Is it correct to say that buying bonds using ETFs is driven by supply and demand and price movement of the ETF while buying directly from government gives a guaranteed income? Can an individual buy bonds directly from the government (in the UK)?
Hi @mm make sure you're using the 5 year rolling median (use rollapplyr) for year-on-year GDP. Then you should get the same numbers. The data's from FRED. Thanks, Ramin.
Hi @Jim Spencer it wouldn't really hedge anything. A hedge usually comes as half of a pair of assets such that it gains/loses when its counterpart does the opposite. Preferably it only gains when the other asset loses and doesn't lose when the other asset gains. A mix of equity and bonds like LS60 doesn't behave that way as it has both bonds and equity in it. But I guess the bonds and equity are both now relatively cheaper - perhaps that what you mean? Thanks, Ramin.
@@Pensioncraft Yes, I did mean theyre much cheaper, and is it not that Bonds do well in environments like now, and equities when economy is good, so its a kind of hedging? My main point is not knowing where we are exactly isn't this type of fund ideal with that 60/40 split such that its diversified during the downturn, and if things bounce back, its a win win?
Hi @Seiko 7 the closest to a guaranteed fixed income is buying a developed market government bond in its domestic currency. Current yields are well below 5%. So I'd say that's probably not possible without taking credit risk which in turn means the income is _not_ guaranteed. Thanks, Ramin.
Investec are doing a 2yr bond with a 4.35% return , if the interest rates keep going up then maybe in a few months (or even sooner) there will be some 5% bonds on the market.
Hi Ramin - I have been following this channel with interest. but there are some things about bonds I do not understand, Why buy government bonds when you can get a short term interest rate 4% from your average building society at the minute- no risk, And what about corporate bonds, wouldn't they have a greater yields? (albeit with slightly more risk?).
1. You may think the value of bonds will rise. 2. To secure a 4% B/S rate you'd normally need to commit your funds for at least one year, whereas with Govt bonds you have access to your funds pretty much immediately.
If inflation is being driven my a lack of commodities and the same level of demand, would that mean that it is worse for the economy, to keep rates high, because the money that should be going to commodity mining is going into bonds instead?
To me, it seems that central bank will have to raise that interest rate significantly to hold inflation. In this case, does this long term bonds still have space to fall?
If you're buying bonds right now, you should only buy longer-term bonds. Bonds shorter than 2 years will drastically increase yields over the next 3-6 months.
I think VUTY still has some legs given the outlook and the dollar strength on income is good! Why only suggest using a tiny bit of capital? Bonds should make up a good part of a balanced portfolio.
I think energy prices are likely to remain high. We have just cut out one of the marginal suppliers (Russia/OPEC+) I think KSA is lying about how much they have left/can pump and everytime the market tries to price a level that would bring new supply online we penalise them with 'Windfall taxes'... Gas was supposed to be Europes transitional fuel until renewables took up the slack. We are now looking at a decade+ of higher energy prices so Inflation is here to stay IMO.
Housing rent prices have a big time lag in the CPI calculation. A big reason inflation is still high. Housing rent is a much much bigger component than fuel/energy.
Hi @19grand my community asked and here's my answer: www.pensioncraft.com/patreon-post/how-i-invest-my-money/I don't usually discuss this on TH-cam any longer, but I occasionally talk about my market crash shopping list. Thanks, Ramin.
@@Pensioncraft thanks Ramin! You know, last night I was watching your video on Global Fund ETFs. Its a really good video. Didn't take much of it in on the first watch. I struggled to understand it, but watched it again and again and learned alot. Thanks again. 😊
Great video Romin. Thank you so much. I enjoy your videos a great deal. At 15:40 you said your core portfolio had three funds, but then you only listed global equity and global bonds. What's the 3rd?
Hi @Jeffrey Wong I'm pleased you like the video. I do have a member video about how I invest for my core portfolio here www.pensioncraft.com/patreon-post/how-i-invest-my-money/
Hi @BiknutProductions That's not true, people are benefitting from the safety and the higher yield and in the UK the capital gains tax efficiency if held outside an ISA or SIPP. Here's a quote from the FT www.ft.com/content/359d8a89-5c89-480a-9109-80d0b0f5f1dc "Hargreaves Lansdown, the UK’s largest do-it-yourself investment platform, said gilt purchases in the first three months of 2024 were three times higher than the same quarter last year, with gilts “by far and away” its most popular fixed-income product, according to Tom Lee, the company’s head of trading. " "Interactive Investor, the second-largest DIY platform, said gilts had attracted more cash than any other investment for 10 straight months, while AJ Bell said four of its top 10 traded securities had been individual gilts so far this year." Thanks, Ramin
I started monthly investment in UK 15-year gilt (goverment bond) index fund, and 5-year inflation-linked gilt index fund, the prices are in low area even compared with 2017 one (dropped > 20% from Dec 2021 peak).
Important to consider that the largest oil producer in the World at the moment is actually the States (neither Russia or Saudi Arabia), and consequently moderately higher oil prices might not actually be a devastating result for America. US ten-year treasury yield is well under three percent so you are getting a crappy fixed-income yield for your bonds. Ultimately, you are probably better off looking to assets that offer a better long-term return than low-yield bonds.
Hi Ramin, In all acknowledgement that your portfolio needs to fit your situation and might not be right for everyone, please could you let us know (in percentage terms so we won't know the size) of asset allocations in your personal portfolio? It would be so interesting to see your assets.
I will never understand why anyone would want to hold bonds. Why not buy a mix of good stable long term companies like Coca-Cola, Microsoft Nike, Google, Apple?
Higher income payouts (vs most dividends), lower risk, more stable. Coca-Cola, MSFT, GOOG, and AAPL are volatile in the short term. Also, the stock market is overvalued right now.
I'm not seeing how inflation drops to 2-3% quickly unless the market crashes. So, I am not buying bonds yet, but I understand why some people are. The yield just isn't high enough.
Inflation is not dropping back to those rates quickly. That is a lie that's perpetrated by the equities industry to convince you to keep giving them your money.
I was buying bonds too but this week with that drop in yields...I think im going to buy only when it goes up to 3,2% on 10Y treasuries. Thanks for the content
Buy whatever you want I only wish you good luck. You're smarter than me no doubt so in any case you will lose money with your investment portfolio and especially with bond at least you're doing great with TH-cam video good luck.
Gud.eve..,sir,,my question?,if ever I hve 1 (one) fed. reserve bond,,then I want to trade or sell it..their is any person to buy?,,thanks sir,,God bless & more power in your youtube channel🙏😇.
I really think bond yields have been falling to rediculous low levels for so long, it's time for a reversal and yields will be increasing for many years to come. In other words bond prices will crash along with share prices. Cash and hard assets will be king, more so hard assets as the CPI will continue marching upwards.
@@wolfiestreet6899 Just my thoughts, thats all. I don't think government bonds are as low risk as they've been over the last 30 or 40 years when yields had a long way to fall. And look at how governments are spending the money.
If yields increase for many years to come exactly what will happen to the federal budget? Isn't currently our payments for our bonds 10% out of our budget, how much higher do you feel this could go without breaking the bank?
Why so much understanding of the markets, if at the end of the day his core portfolio is very basic? Isn't having an strategic portfolio that usually lose money just means that trying to position yourself depending on the current macro situation has no value?
Hi @J P do complex portfolios perform better? Also, this is a financial education channel not a stock tipping channel - there are plenty of those. The goal is to educate people to make up their own minds about how to invest. People learn from mistakes (theirs and those of other people) so I think that it's important to share those too. Thanks, Ramin.
Stock markets seem great until you encounter your first major downturn. Sure, the SP500 has never lost money over a 20 yr span but bonds would be profitable in far less time than 20 yrs. in pretty much any case.
@PensionCraft Hi Ramin! I am a big follower of your channel, I am an engineer and the data analysis and models you put out there are top notch, I believe you didn;t understand my message. Let me put it in another way. If even you that has such a deep understanding and does such deep analysis to find value still have a big core portfolio which is the commonly known ETF diversification and then a small "strategic plays for fun" which mostly loses money, isn't the whole work you are putting in finding this macro trends / asymmetric risk reward plays massively diminishing returns? All the wasted time fur such a small gain? Also, just as constructive feedback, I found strange in this video that you talk about buying bonds but analyse bond ETFs, I have never bought US bonds so I started looking into it and couldn't find a way to buy them directly as an European investor, is that what you are buying ETFs instead? Don't they have completely different investment profiles than regular bonds? I was thinking that a good play right now after watching your video is buy 6 months bonds just for the 3.5% interest while waiting for markets to correct but the short term ETFs don't seem a good play for that...would be great a video about how to buy bonds US and difs between ETF bond plays vs Real bonds.. Thanks man, really appreciate your work!
Never buy a bond fund. Been in Muni bonds for twenty years . one best investments I made own the bond to maturity. Beat my stocks over that time period in the S&P. Tax free sleep well at night. No funds own the paper.!
It would seem reasonable to buy short duration treasury inflation protected securities right now (TIPS)? I realize the inflation rate used to link the securities is a bit low compared to real inflation, but should do better than the average bond fund, even short duration bonds?
Bridgewater would agree linkers are a good idea right now, but in my experience it's hard to find a bond fund with short duration linkers. Do you know one?
Bonds will only go lower as interest rates go up. Right now you want to be in cash. Wait for the stock market to bottom and then either buy growth stocks or dividend stocks or a mix. A dividend stock like GSK or BCE give over 4% return ,more then you would get with a bond.
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless
Haha i remember 2y ago you spoke of hyper inflation, money printing and so on and now you want to buy bonds? Rofl. What happened with “fed will not let stocks crash narrative”?
IMO, it is time to buy stocks. The 40 year bond bull market is over, and there is only one way the capital value is headed. Stocks can handle inflation, bonds can not.
We are quite likelt still headed for low inflation long-term because of demographic factors and technological development + some sort of recession, or massive crisis lowering demand for years to come
i believe the charts thrown have too much data and the conclusion does not weight the 4 (2 pro, 2 against bonds) leads. also the Fun Portfolio does not make much sense. Is it better to research an argument to which commit to have skin in the game in the core portfolio. side projects take away time to the core principal investment and also can be misleading for the audience. but as always, thank you for the analysis Ramin, you are in my top 1 hands-on macro analysis channel
When interest rates rise they devalue bonds currently in circulation. BOE is only half way or so through raising rates so expect it to drop more before rising due to higher yields and probably lowering of interest rates. You are getting them cheaper now than they will be.
Thank you for the information..way to many ifs in your analysis. We are in a recession. During inflation prices go up and never down that's called a Depression. Good luck with your bond. On a different not I did buy I-Bonds..
so…whats the bottımline? tell us what you are buying and selling? all the analyiais and when it comes to tell us what to do… well this is fun portdolio and it is a small portion of my money blah blah blah:)))
Hi Naso K the idea is that this is financial education that helps you make up your own mind. I tell our subscribers what I'm doing with my portfolio but I always say "don't do what I do". It's best to take ownership of your own portfolio rather than be dependent on others. Thanks, Ramin.
Twenty percent of my portfolio is long term treasuries. They're my worst performer this year. So that's mostly what I've been buying more of. I'm not chasing today's returns; I'm strengthening my portfolio for tomorrow.
@@frixosfriedman7813 I buy mine as the ETF VGLT through Vanguard and M1 Finance. If you're American you can get VGLT through any brokerage account. Ramin mentions TLT; that's another ETF of long-term treasuries created by iShares instead of Vanguard. But TLT has an expense ratio of 0.15 and VGLT has one of 0.04, so VGLT is cheaper. If you're a buy-and-hold investor and somewhat of a beginner, I recommend you do some research about asset class correlations before you buy long-term treasuries (LTT). They are highly volatile, so you have to know what purpose they play in your portfolio. Otherwise when they have a bad year like this year you will be tempted to doubt and sell them when they are low, permanently losing yourself a lot of money. There are times when long-term treasuries will be performing horribly, like 2022, and there will be times when they do better than anything else, like 2000, 2008, 2011, and 2014. If you're a strategic investor, like Ramin is with his play portfolio, then the purpose of LTT is to buy them when you think they are low and might go up soon, and to sell them when you think they are high and might go down soon. That's different from buy-and-hold investing, for which LTT play the role of moving differently from the rest of your assets, lowering the volatility of your overall portfolio. In 2022 they have been going down with everything else, but you have to understand in advance that that can happen but doesn't happen very often. If you are young, LTT aren't necessary the best thing to have in your portfolio. They can be, but not necessarily. It's better for young buy-and-hold investors to focus on equity ETFs instead of bond ETFs. But I'm not a financial advisor, so you have to do your own research and try to understand as much as possible what you are doing, and why, when you buy stocks and ETFs. Good luck.
@@Han-es8qu I buy VGLT, which has an effective duration of 17 years. Within that time frame, long-term treasury rates will swing up and down, and I'll be rebalancing in and out of them, selling high and buying low.
@@frixosfriedman7813 With VGLT, you get your yield payments at the end of each quarter. The biggest payout is in the forth quarter, the second largest payout is in the second quarter, and the first and third quarter payouts are small. If you want to invest in bonds for yield instead of for their low correlation to equities, then it would be good to consider corporate bonds, which have a higher yield. But there are different risks with those.
I put 20% of my pension into bond ETFs before the US CPI data release. They went up 1% whilst the S&P dropped 5%.
Also, got in just before distribution date.
Glad I watched this video.
I bet your'e not glad you watched it now...
@@arturo468 why is that? I sold them for a profit.
This is the best analysis better than fund managers I had been listened on the media for months. Thank you so much
thanks - I am glad you found it helpful @Khammarut Chaimongkon
This 77yrs old investor advises.... Use pound cost averaging, ignore rises and falls, let the dividends roll up, avoid high commission charges like the Covid, buy funds only, unless you have insider knowledge.
Finally, mix equity funds, bond funds, commodity funds.
Do not trust newspaper 'experts'.
Agree completely!
Where can to buy and sell these bonds?
Listened to this great video again. Decided to buy a one month T Bill directly. The payout is reasonable and I can repeat for as long as the rate stays decent.
Thanks for the video. I'd be curious to hear a 6 month update (or maybe you've made one but I couldnt' find it?). Did you keep your bonds? TLT seems to bottomed in November and would have been another whopping 20% drop...almost 30% for 2022!
Aged like Milk
Looks like yet another disastrous recommendation to me.
Thanks for a great video!
Question: Why do people or institutions invest in long government bonds in times when the yield is very low? Which means that the price of the bond is very high. And if the interest rate rises, the price of the bond falls. It's more likely that the yield/interest rate will increase over time and lower the bond's value. So, what is the incentive to invest in times like this? For example, if banks invest in long term government bonds with low yield that will lead to a mismatch in duration between borrowing and lending.
And How can banks hedge against higher interest rates without selling their long-term government bonds and make a loss? We have seen recent example of this regarding SVB, Silicon Valley Bank and Signature bank.
👍Updates on bonds would be interesting. Most people expect a US recession so bonds are now interesting.😊
It would be interesting to see how these bond buying recommendations have fared over the last year - not too well I suspect.
An understatement. Inflation has ravaged them
The horror show continues
I'm on the opposite side of the fence to you, still holding TLT shorts because:,
1. Inflation is sticky (low supply due to supply disruptions in many sectors i.e food, energy, chip shortages, labour, china lockdowns etc, and employment and wage growth, fiscal policy causing high demand) which could mean need for much high nominal rates if Fed is serious about reducing inflation to 2%. I don't think the inflation readings will start to come down for some time, and rates could rise significantly in every FOMC meeting.
2. The FED isn't buying bonds anymore. Can private investors really sustain similar price levels to when the FED was an active participant in the bond market? There's much less liquidity now.
Did you close your short?
@@bspiderm yeah I sold the TLT shorts maybe 1 month ago? At 114
Honestly despite that comment Ramin kind of spooked me with this video 🤣🤣 I bought the put options at 144 around April time so they did well.
Not all good news though, also had some SPY put options which are not exactly printing right now haha. Expire in December though
@@FamilyFinancialCoach are you gonna short TLT again or no? TLT is crashing back down lately
For year and years, I lost shorting the stock market. Last fall I finally gave up and switched to buying bonds. The bad luck continues.
You got in too early. Should have got in when Ramin did. I got in this week and am now down
@@voice.of.reason did you buy TLT?
Way too nearly. Yields goings to 8% imo
@@voice.of.reason this aged horribly
Many municipal bonds are also tax free, meaning they are NOT subjected to local, state or federal taxes.
A few questions. I see you buy a bond through an ETF fund. Is there a way to buy the bond directly, so you hold the rights to the bond itself? For instance. I want to buy a three-year bond worth $10,000 which yields 3%. I intend to keep this bond for three years. So I collect the yield each year and get my $10,000 back after 3 years.
How does this work in ETF fund? You have management fees and I suppose since ETF funds are trading bonds, its value goes up and down as does the yield. Is the yield in ETF bond fund variable then, you get different returns on your initial investment depending on the bond price? And, if after three years you find yourself in time when bond is 20% down you only get $8,000 back after the bond matures?
Wouldn’t then be better to bypass the ETF fund, and hold on to the bond itself? What am I missing here?
Its very hard to own Gilt's directly because there isn't much of a secondary market for them. You're going to struggle to find someone to sell you £10,000 worth of gilts for example. They tend to be transacted in much larger quantities and they're not usually accessible to retail investors like us.
Hi what broker will you recomend to buy bonds?
@PensionCraft, What kind of bonds to invest as retiree? thanks
Title of this video is wrong. You are buying bond etf not bonds. There is a difference between these two. Bond etf has nothing to do with fixed income and can fluctuate a lot (depending on duration). We've had unpleasant example of this fluctuation recently. Buying actual bonds directly is a fixed, guaranteed income investment but good luck in getting those if you are a retail investor based in UK.
Thank you! Very interesting. Be sure to try the methods.
Glad you enjoyed it @Douglas Strong
I’ve been putting 10% of my monthly investment into bonds since January. Currently they have the highest return to date the US interest rate increases have sent them upwards. I’ll start selling out when interest takes first cut. Return sitting at 9.69%.
Hi Ramin, thank you for a lot of great content - very educative.
Can you explain difference between buying bonds using ETFs (e.g. some vanguard ones like VGOV) and buying bonds directly from government. Is it correct to say that buying bonds using ETFs is driven by supply and demand and price movement of the ETF while buying directly from government gives a guaranteed income? Can an individual buy bonds directly from the government (in the UK)?
Following..
Following
You can buy bonds directly from a bank, eg 1 year fixed return bond, 2 yr etc. The 1yr rate is getting up to about 3.75% at the moment.
good question....would love the answer!!
Following
Has anyone tried recreating the chart in 14:52? I get slightly different version, can't figure out why?
Hi @mm make sure you're using the 5 year rolling median (use rollapplyr) for year-on-year GDP. Then you should get the same numbers. The data's from FRED. Thanks, Ramin.
I have never bought bonds and not been disappointed
So would a fund like Lifestrategy 60/40 be a good hedge as its selling at a lower price now? It has a good mix of everything
Hi @Jim Spencer it wouldn't really hedge anything. A hedge usually comes as half of a pair of assets such that it gains/loses when its counterpart does the opposite. Preferably it only gains when the other asset loses and doesn't lose when the other asset gains. A mix of equity and bonds like LS60 doesn't behave that way as it has both bonds and equity in it. But I guess the bonds and equity are both now relatively cheaper - perhaps that what you mean? Thanks, Ramin.
@@Pensioncraft Yes, I did mean theyre much cheaper, and is it not that Bonds do well in environments like now, and equities when economy is good, so its a kind of hedging? My main point is not knowing where we are exactly isn't this type of fund ideal with that 60/40 split such that its diversified during the downturn, and if things bounce back, its a win win?
So it seems uncertain how bonds perform when faced with stagflation?
Hi Pension Craft. How can I get a guaranteed say 5% annually for the next 10 years? Thank you
Hi @Seiko 7 the closest to a guaranteed fixed income is buying a developed market government bond in its domestic currency. Current yields are well below 5%. So I'd say that's probably not possible without taking credit risk which in turn means the income is _not_ guaranteed. Thanks, Ramin.
Investec are doing a 2yr bond with a 4.35% return , if the interest rates keep going up then maybe in a few months (or even sooner) there will be some 5% bonds on the market.
Lucid, calm, rational as always. Love this chanel 💕
Thank you @James S
It is indeed a lovely fragrance.
@@wolfiestreet6899 lol. . OK channel. 👍
Hi Ramin - I have been following this channel with interest. but there are some things about bonds I do not understand, Why buy government bonds when you can get a short term interest rate 4% from your average building society at the minute- no risk, And what about corporate bonds, wouldn't they have a greater yields? (albeit with slightly more risk?).
1. You may think the value of bonds will rise. 2. To secure a 4% B/S rate you'd normally need to commit your funds for at least one year, whereas with Govt bonds you have access to your funds pretty much immediately.
Good work. Thank you
Thank you too @Gurbachan Singh
If inflation is being driven my a lack of commodities and the same level of demand, would that mean that it is worse for the economy, to keep rates high, because the money that should be going to commodity mining is going into bonds instead?
What about corporate bonds? Is it time to buy them too? Or they are gonna be falling because of the recession increase the probability of default?
Another great video, thanks Ramin!
Glad you enjoyed it @IBBarochia
Why don't any mainstream Bond investors talked about buying high grade corporate bonds
So we buy US bonds and then get destroyed by the exchange rate once the pound becomes strong again?
I doubt that will happen, if the $$ is going down the £ is going down with it
This was a great video.
Glad you enjoyed it @Rinaldo Merlo
Has your opinion changed on bonds? Are we finally seeing the lowest numbers or is inflation still on the up 😅
To me, it seems that central bank will have to raise that interest rate significantly to hold inflation. In this case, does this long term bonds still have space to fall?
yes
Great Vid, very well explained, wish I'd seen this two years ago. Thank-you.
Glad you enjoyed it @D Smith
If ever you can update with bond etf like tip and jnk
If you're buying bonds right now, you should only buy longer-term bonds.
Bonds shorter than 2 years will drastically increase yields over the next 3-6 months.
I think VUTY still has some legs given the outlook and the dollar strength on income is good! Why only suggest using a tiny bit of capital? Bonds should make up a good part of a balanced portfolio.
agreed, maybe the 60/40 can make a comeback
I think energy prices are likely to remain high. We have just cut out one of the marginal suppliers (Russia/OPEC+) I think KSA is lying about how much they have left/can pump and everytime the market tries to price a level that would bring new supply online we penalise them with 'Windfall taxes'... Gas was supposed to be Europes transitional fuel until renewables took up the slack. We are now looking at a decade+ of higher energy prices so Inflation is here to stay IMO.
We also cut out a big part of US petroleum production with sleepy creepy Joe Biden as well don’t forget that part .
Thanks Ramin. Do you have any videos about your Core Portfolios?
Hi @Dylan PAN I do have a members video about how I invest for my core portfolio here www.pensioncraft.com/patreon-post/how-i-invest-my-money/
Housing rent prices have a big time lag in the CPI calculation. A big reason inflation is still high. Housing rent is a much much bigger component than fuel/energy.
Thanks, Ramin. Another great video. This is really helpful.
My pleasure @msprinz100
Hello, did you buy TLT? Once in a lifetime opportunity
Do you have a video on your core portfolio?
Hi @19grand my community asked and here's my answer: www.pensioncraft.com/patreon-post/how-i-invest-my-money/I don't usually discuss this on TH-cam any longer, but I occasionally talk about my market crash shopping list. Thanks, Ramin.
@@Pensioncraft thanks Ramin! You know, last night I was watching your video on Global Fund ETFs. Its a really good video. Didn't take much of it in on the first watch. I struggled to understand it, but watched it again and again and learned alot. Thanks again. 😊
stagflation - rates up, growth flat.. companies under stress.. cds widens with rates up.. bonds get hammered double and you buy bonds??
Is SPHY a good bond to buy?
can i buy with a credit card ?
In your opinion, will treasury bond a good short term investment for 6 months?what is your opinion on Ibond?
Where can we get 3x leveraged us treasury etf? 🤔
Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF)
All I know is index Bond's go up when the 10 Treasury Note goes down.
Thanks ramin, your analysis is always brilliant and loaded with facts
My pleasure @Discombobulated
Where is it best to store funds when neither bonds or equities are safe? Commodities? Real estate?
Both of those could fall too, though some say bonds are now preferable to cash at these low prices
Triple A Presentation !
Great video Romin. Thank you so much. I enjoy your videos a great deal. At 15:40 you said your core portfolio had three funds, but then you only listed global equity and global bonds. What's the 3rd?
Hi @Jeffrey Wong I'm pleased you like the video. I do have a member video about how I invest for my core portfolio here www.pensioncraft.com/patreon-post/how-i-invest-my-money/
I have made more money in bonds dividends then all the s&p 500 a200 way more cash in dividend returns if you find the right one
It's interesting how a year later this video didn't age very well. Now, no one wants to touch government bonds with a 10 foot pole.
Hi @BiknutProductions
That's not true, people are benefitting from the safety and the higher yield and in the UK the capital gains tax efficiency if held outside an ISA or SIPP. Here's a quote from the FT www.ft.com/content/359d8a89-5c89-480a-9109-80d0b0f5f1dc
"Hargreaves Lansdown, the UK’s largest do-it-yourself investment platform, said gilt purchases in the first three months of 2024 were three times higher than the same quarter last year, with gilts “by far and away” its most popular fixed-income product, according to Tom Lee, the company’s head of trading. "
"Interactive Investor, the second-largest DIY platform, said gilts had attracted more cash than any other investment for 10 straight months, while AJ Bell said four of its top 10 traded securities had been individual gilts so far this year."
Thanks,
Ramin
We are on the verge of topping r
the inflation percentage of 78-81
Now what do I buy?
Excellent
we are already in a recession.
Parroting the Woods narrative....
Great video. I’m waiting to see if new reserve currency from BRICS countries causes depression & hyperinflation in US.
Decade away.
The money that floods into bond the less you are helping with inflation
Why not just buy individual bonds ??
Seems to me the argument against buying bonds is stronger than the argument for
Plus also if the fed pivots, they will print again and inflation will keep going
Hi Ramin , love your analysis !! keep on doing what I call public service! (whats not taught at schools and it should ) , have you got Etoro account?
Hi Rui thank you! No I don't have an Etoro account. Thanks, Ramin.
I started monthly investment in UK 15-year gilt (goverment bond) index fund, and 5-year inflation-linked gilt index fund, the prices are in low area even compared with 2017 one (dropped > 20% from Dec 2021 peak).
Important to consider that the largest oil producer in the World at the moment is actually the States (neither Russia or Saudi Arabia), and consequently moderately higher oil prices might not actually be a devastating result for America. US ten-year treasury yield is well under three percent so you are getting a crappy fixed-income yield for your bonds. Ultimately, you are probably better off looking to assets that offer a better long-term return than low-yield bonds.
Hi Ramin,
In all acknowledgement that your portfolio needs to fit your situation and might not be right for everyone, please could you let us know (in percentage terms so we won't know the size) of asset allocations in your personal portfolio? It would be so interesting to see your assets.
Ramin*
@@NZAnimeManga thanks 😅
Copycat....
Just buy 6month treasuries. Price risk doesn’t exist as you can hold till maturity. This is better then treasury funds
So no lambos then?
I will never understand why anyone would want to hold bonds. Why not buy a mix of good stable long term companies like Coca-Cola, Microsoft Nike, Google, Apple?
less risk
Higher income payouts (vs most dividends), lower risk, more stable. Coca-Cola, MSFT, GOOG, and AAPL are volatile in the short term. Also, the stock market is overvalued right now.
Because they're in the withdrawal stage and they can't stomach the risk of 100% stocks.
Buying TLT?
Watch Harry’s rant. He was talking about TLT since last month.
Who's Harry?
I'm not seeing how inflation drops to 2-3% quickly unless the market crashes. So, I am not buying bonds yet, but I understand why some people are. The yield just isn't high enough.
Inflation is not dropping back to those rates quickly. That is a lie that's perpetrated by the equities industry to convince you to keep giving them your money.
What's your view on TIPS?
I was buying bonds too but this week with that drop in yields...I think im going to buy only when it goes up to 3,2% on 10Y treasuries. Thanks for the content
What about interest rates?
Buy whatever you want I only wish you good luck. You're smarter than me no doubt so in any case you will lose money with your investment portfolio and especially with bond at least you're doing great with TH-cam video good luck.
Gud.eve..,sir,,my question?,if ever I hve 1 (one) fed. reserve bond,,then I want to trade or sell it..their is any person to buy?,,thanks sir,,God bless & more power in your youtube channel🙏😇.
I really think bond yields have been falling to rediculous low levels for so long, it's time for a reversal and yields will be increasing for many years to come. In other words bond prices will crash along with share prices. Cash and hard assets will be king, more so hard assets as the CPI will continue marching upwards.
Where did you buy your crystal ball?
@@wolfiestreet6899 Just my thoughts, thats all. I don't think government bonds are as low risk as they've been over the last 30 or 40 years when yields had a long way to fall. And look at how governments are spending the money.
If yields increase for many years to come exactly what will happen to the federal budget? Isn't currently our payments for our bonds 10% out of our budget, how much higher do you feel this could go without breaking the bank?
@@ianbaker2599 The upside risk of yields is greater than the downside.
Why so much understanding of the markets, if at the end of the day his core portfolio is very basic? Isn't having an strategic portfolio that usually lose money just means that trying to position yourself depending on the current macro situation has no value?
Hi @J P do complex portfolios perform better? Also, this is a financial education channel not a stock tipping channel - there are plenty of those. The goal is to educate people to make up their own minds about how to invest. People learn from mistakes (theirs and those of other people) so I think that it's important to share those too. Thanks, Ramin.
Stock markets seem great until you encounter your first major downturn. Sure, the SP500 has never lost money over a 20 yr span but bonds would be profitable in far less time than 20 yrs. in pretty much any case.
@PensionCraft Hi Ramin! I am a big follower of your channel, I am an engineer and the data analysis and models you put out there are top notch, I believe you didn;t understand my message. Let me put it in another way. If even you that has such a deep understanding and does such deep analysis to find value still have a big core portfolio which is the commonly known ETF diversification and then a small "strategic plays for fun" which mostly loses money, isn't the whole work you are putting in finding this macro trends / asymmetric risk reward plays massively diminishing returns? All the wasted time fur such a small gain?
Also, just as constructive feedback, I found strange in this video that you talk about buying bonds but analyse bond ETFs, I have never bought US bonds so I started looking into it and couldn't find a way to buy them directly as an European investor, is that what you are buying ETFs instead? Don't they have completely different investment profiles than regular bonds? I was thinking that a good play right now after watching your video is buy 6 months bonds just for the 3.5% interest while waiting for markets to correct but the short term ETFs don't seem a good play for that...would be great a video about how to buy bonds US and difs between ETF bond plays vs Real bonds..
Thanks man, really appreciate your work!
how do you check your fan following/loyalty of subscribers ? talk about bonds for 18 min :)
Surely you know that bonds are cool Rakesh? 8-) Thanks, Ramin.
Come in to see if this guy will survive the inflation linked bonds crisis...
15:30 "This is where I do all those tactical trades... which usually lose money." 😅😅😅
Never buy a bond fund. Been in Muni bonds for twenty years . one best investments I made own the bond to maturity. Beat my stocks over that time period in the S&P. Tax free sleep well at night. No funds own the paper.!
Exactly what time period was that? Must have been very short
It would seem reasonable to buy short duration treasury inflation protected securities right now (TIPS)? I realize the inflation rate used to link the securities is a bit low compared to real inflation, but should do better than the average bond fund, even short duration bonds?
Bridgewater would agree linkers are a good idea right now, but in my experience it's hard to find a bond fund with short duration linkers. Do you know one?
Bonds will only go lower as interest rates go up. Right now you want to be in cash. Wait for the stock market to bottom and then either buy growth stocks or dividend stocks or a mix. A dividend stock like GSK or BCE give over 4% return ,more then you would get with a bond.
No one knows when the market will bottom...hope is not a plan.
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless
No.
I dont trust equities right now. I will be maxing out Ibonds first.
@@matthewphillips5483 Individual bonds?
Just buy the bond instead of this etf and hold it to maturity.
Haha i remember 2y ago you spoke of hyper inflation, money printing and so on and now you want to buy bonds? Rofl. What happened with “fed will not let stocks crash narrative”?
He figured out he was wrong I guess
That didn't age well
IMO, it is time to buy stocks. The 40 year bond bull market is over, and there is only one way the capital value is headed. Stocks can handle inflation, bonds can not.
We are quite likelt still headed for low inflation long-term because of demographic factors and technological development + some sort of recession, or massive crisis lowering demand for years to come
How’s that working out for you? 😂
Why not get TIPS if you're concerned about inflation?
i believe the charts thrown have too much data and the conclusion does not weight the 4 (2 pro, 2 against bonds) leads. also the Fun Portfolio does not make much sense. Is it better to research an argument to which commit to have skin in the game in the core portfolio.
side projects take away time to the core principal investment and also can be misleading for the audience.
but as always, thank you for the analysis Ramin, you are in my top 1 hands-on macro analysis channel
Cons: Long-term debt cycle. Like what Dalio explains.
Great video as usual. Are you still thinking the same way after Liz Truss and Kamikwasi have completely decimated the UK economy?
Vanguard UK Government Bond fund YTD -15% not a good proposition during high inflation and rising interest rates
When interest rates rise they devalue bonds currently in circulation. BOE is only half way or so through raising rates so expect it to drop more before rising due to higher yields and probably lowering of interest rates. You are getting them cheaper now than they will be.
@@8G00SE8 You don't know what the BoE will or won't do.
@@wolfiestreet6899 Yeah 15% when the £ crashes aka 1992
Thank you for the information..way to many ifs in your analysis. We are in a recession. During inflation prices go up and never down that's called a Depression. Good luck with your bond. On a different not I did buy I-Bonds..
Are we?
so…whats the bottımline? tell us what you are buying and selling? all the analyiais and when it comes to tell us what to do… well this is fun portdolio and it is a small portion of my money blah blah blah:)))
Hi Naso K the idea is that this is financial education that helps you make up your own mind. I tell our subscribers what I'm doing with my portfolio but I always say "don't do what I do". It's best to take ownership of your own portfolio rather than be dependent on others. Thanks, Ramin.
Twenty percent of my portfolio is long term treasuries. They're my worst performer this year. So that's mostly what I've been buying more of. I'm not chasing today's returns; I'm strengthening my portfolio for tomorrow.
Tomorrow or the next century??
Can I ask, i am a bit of a beginner - how do you go about buying treasuries, and how do you receive the yield from them?
@@frixosfriedman7813 I buy mine as the ETF VGLT through Vanguard and M1 Finance. If you're American you can get VGLT through any brokerage account. Ramin mentions TLT; that's another ETF of long-term treasuries created by iShares instead of Vanguard. But TLT has an expense ratio of 0.15 and VGLT has one of 0.04, so VGLT is cheaper.
If you're a buy-and-hold investor and somewhat of a beginner, I recommend you do some research about asset class correlations before you buy long-term treasuries (LTT). They are highly volatile, so you have to know what purpose they play in your portfolio. Otherwise when they have a bad year like this year you will be tempted to doubt and sell them when they are low, permanently losing yourself a lot of money. There are times when long-term treasuries will be performing horribly, like 2022, and there will be times when they do better than anything else, like 2000, 2008, 2011, and 2014.
If you're a strategic investor, like Ramin is with his play portfolio, then the purpose of LTT is to buy them when you think they are low and might go up soon, and to sell them when you think they are high and might go down soon. That's different from buy-and-hold investing, for which LTT play the role of moving differently from the rest of your assets, lowering the volatility of your overall portfolio. In 2022 they have been going down with everything else, but you have to understand in advance that that can happen but doesn't happen very often.
If you are young, LTT aren't necessary the best thing to have in your portfolio. They can be, but not necessarily. It's better for young buy-and-hold investors to focus on equity ETFs instead of bond ETFs. But I'm not a financial advisor, so you have to do your own research and try to understand as much as possible what you are doing, and why, when you buy stocks and ETFs. Good luck.
@@Han-es8qu I buy VGLT, which has an effective duration of 17 years. Within that time frame, long-term treasury rates will swing up and down, and I'll be rebalancing in and out of them, selling high and buying low.
@@frixosfriedman7813 With VGLT, you get your yield payments at the end of each quarter. The biggest payout is in the forth quarter, the second largest payout is in the second quarter, and the first and third quarter payouts are small. If you want to invest in bonds for yield instead of for their low correlation to equities, then it would be good to consider corporate bonds, which have a higher yield. But there are different risks with those.
great presentation but i'm reminded of hotshot brokers recommending bonds in the early eighties