10-Year Yield hits 5%, stock market panics
US 10 Year Yield hits 5.0%, a level not seen since mid 2007. This likely cements the fate of existing bond-hodlers, which have seen 3 years of declines. How high will the US 10 year yield go, nobody knows, this likely markets the near bottom for bonds, and likewise bond ETFs like the iShares 20 Year+ Treasury ETF (Ticker symbol TLT).
TLT at a 5-year low
Current div yield on TLT (trailing twelve months) stands at 3.98%, although one has to factor the 30% withholding tax for non-US treaty nationals.
Probably one of the simpler ways to get involved in the bond market.
Other alternatives are to buy bonds from a broker that has access to U.S. treasury bonds. However do note that for U.S. Treasury Bonds longer than 1 year duration have 30% dividend/interest tax, so the yield you are getting will be less 30%, eg 5% yield minus 30% tax implies an effective yield of 3.5%. Alternatively, one can consider buying US Treasury bills (less than 1 year) and still get around 5%, which do not have dividend tax.
$iShares 20+ Year Treasury Bond ETF(TLT)$ $S&P 500(.SPX)$ $Invesco QQQ Trust-ETF(QQQ)$
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Thank goodness I stumbled upon your article! I'm going all in on shorting TLT at that rock-bottom $80.xx level! 📉💪
I agree with everything you said, but am still happily buying TLT as it makes new lows. Along with new issue short term treasuries. TLT is a very small overall % of my portfolio and I'll happily buy more if and when it goes lower. No one knows how this tightening phase is going to end, there are scenarios in which equities crash and bonds rally. Although I do also hold a lot of equities still, I feel better buying bonds at decades low than equities near the top. Thanks and good luck.
More sellers than buyers and low volatility. TLT has not made any upward meaningful moves. The calls should be free because they are low risk.🥂
Umm... As long as the Fed keeps raising interest rates the TLT is going down. Bond prices are inversely related to interest rates
Anybody have any data on short interest for the bond market? I imagine it is at extreme levels.