Selling long term bonds to rebalance?

Discussion of the Bond portion of the Permanent Portfolio

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vnatale
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Selling long term bonds to rebalance?

Post by vnatale » Wed Dec 11, 2019 8:34 pm

One is always supposed to be buying the longest bonds, i.e, closest to 30 years, whenever buying in a rebalance?

How about when selling in a rebalance? Does one sell the shortest bonds, i.e., those closest to 20 years? I don't think I've seen an answer to this anywhere in my readings.

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Pet Hog
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Re: Selling long term bonds to rebalance?

Post by Pet Hog » Thu Dec 12, 2019 1:27 pm

That's what I intend to do (although I'm targeting a 25-to-30-year range). Longer-maturity bonds have greater volatility, and that's what we are trying to take advantage of with the PP strategy. I guess there might be tax considerations that would favor selling longer-maturity holdings, so you should do what's best in your particular situation.
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