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.
Vinny
Selling long term bonds to rebalance?
Moderator: Global Moderator
Selling long term bonds to rebalance?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Re: Selling long term bonds to rebalance?
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.