Help me get over my fear of LTTs

Discussion of the Bond portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
mdwilson1991
Associate Member
Associate Member
Posts: 39
Joined: Wed Dec 11, 2019 3:46 pm

Help me get over my fear of LTTs

Post by mdwilson1991 » Wed Dec 11, 2019 4:04 pm

Hi folks,

I've been reading here a while, read Best Laid Plans, Rowland's book. I've been trying to pull the trigger and move to the PP or a variation, like GB.

I can't seem to get past my fear (perhaps irrational ) of the long term treasuries.

I know stocks can crash and stay there for ages. But somehow the fact that bond returns are inverse to interest rate movements, coupled with us being in a low rate environment really makes long bonds scary.

I don't currently hold TLT or an equivalent, and the thought of dumping 20+% into it and watching it get crushed for the rest of my life if rates move up...

I try to think of it in terms of stocks - they can move rapidly down as well, but they don't have that direct tie to the interest rate environment we are in.

Can anyone offer some words to help me calm my fears? Thanks---
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Help me get over my fear of LTTs

Post by mathjak107 » Wed Dec 11, 2019 5:16 pm

About the best thing that can be said is hopefully when rates get high enough they slow the economy and rates come down ....

The bad thing is as I showed quite a few times , since the 1980’s we have pretty much had decades of falling rates with a few speed bumps as I call them ...if the ride back up takes decades then you are correct in your worrying ...I know I have been an investor since 1987 and have never experienced the same kind of rate reversal upward that brought us to these low levels downward .


We have had bonds stumble briefly , in what was just about a long 40 year slide .

Despite the fact the pp is supposedly neutral , it really is geared more for falling rates then rising rates and can carry a lot of weight at times when gold and bonds move together downward. Rising bond rates seems to be kryptonite to the pp
Pet Hog
Executive Member
Executive Member
Posts: 257
Joined: Tue May 28, 2013 4:08 pm

Re: Help me get over my fear of LTTs

Post by Pet Hog » Wed Dec 11, 2019 7:30 pm

Hi mdwilson1991

In my opinion, an important part of investing in the PP or GB is considering the performance of the total portfolio, as a whole, and not that of its individual components -- one or more of which will inevitably be sucking at any one time. Perhaps it will be LTTs that will suck in the next few years. Who knows? Try not to fall in or out of love with any of the assets.

Are we in a low-rate environment? Historically, yes. But in a few years we might look back fondly at LTT rates of 2.25% as the good old days. For decades people have been saying that LTT rates have nowhere to go but up. The "low" rates today reflect the consensus opinion of all the investors in the world. So that means rates are neither low nor high, but just right for today's economic conditions, as best as we can judge.

If, however, rates do go up, that means that the value of existing LTTs will go down, and the PP investor will be buying more of them as the lagging asset (either when adding new funds or rebalancing). The investor will now have LTTs earning a higher rate. That's a benefit going forward.

I like to consider the numbers when thinking about these things. Thirty-year treasuries have a yield of about 2.25% today. They have a duration of about 20 years. There's a rule of thumb that duration can be considered approximately equal to the percentage movement of bond value in response to a 1% move in interest rates. Let's say interest rates go up dramatically -- say by 4% in the next 12 months. That's four 1% moves, each time decreasing the bond value by about 20% (i.e., retaining only 80% of the value). That compounds to about 40% bond value after a year. If you have a PP originally worth $400,000, then the $100,000 in LTTs would go down to about $40,000 when the LTT rate reaches 6.25%. Total portfolio value would be $340,000 (assuming no responses from gold, stocks, and cash -- in actuality I'd expect them to soften the blow). That's a PP loss of 15%. Bad by PP standards, sure, but not that bad by traditional investing standards. You'd rebalance by buying $45,000 of new LTTs; you'd now own $85,000 in LTTs earning 6.25%. If rates go down from there, you'll do well; if they go up further, at least you'll be offset by those juicy coupon payments.
User avatar
vnatale
Executive Member
Executive Member
Posts: 9422
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Help me get over my fear of LTTs

Post by vnatale » Wed Dec 11, 2019 8:19 pm

mdwilson1991 wrote:
Wed Dec 11, 2019 4:04 pm
Hi folks,

I've been reading here a while, read Best Laid Plans, Rowland's book. I've been trying to pull the trigger and move to the PP or a variation, like GB.

I can't seem to get past my fear (perhaps irrational ) of the long term treasuries.

I know stocks can crash and stay there for ages. But somehow the fact that bond returns are inverse to interest rate movements, coupled with us being in a low rate environment really makes long bonds scary.

I don't currently hold TLT or an equivalent, and the thought of dumping 20+% into it and watching it get crushed for the rest of my life if rates move up...

I try to think of it in terms of stocks - they can move rapidly down as well, but they don't have that direct tie to the interest rate environment we are in.

Can anyone offer some words to help me calm my fears? Thanks---
Have you read this?

Bond FAQ
viewtopic.php?f=3&t=14

Just read it again myself to help resolve my concerns regarding long-term bonds and where current interest rates are now with them.

Vinny
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."
boglerdude
Executive Member
Executive Member
Posts: 1313
Joined: Wed Aug 10, 2016 1:40 am
Contact:

Re: Help me get over my fear of LTTs

Post by boglerdude » Wed Dec 11, 2019 9:04 pm

Japan 30yr .44%

The 1st world is getting richer and older. Savings glut. Start buying in, you could wait till the election to get to 20%, if Trump wins there will be a short boost in rates
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Help me get over my fear of LTTs

Post by mathjak107 » Thu Dec 12, 2019 2:30 am

while coupon rates go up when rates rise , the long duration of a fund like tlt would take about 15 years to see today's rate assuming you are buying in now and assuming a 1% rise in rates . that is how long it would take to offset the drop in nav and just get the rate you had the day you bought in ..

but you would still be getting 2% in a 3% world ... so for me it would take longer to forge ahead again then i likely have left in time if rates rise and trend upward ..

right now the fed stated that they will let inflation even go over 2% so odds are pretty good investors will want more to buy longer term bonds .

in fact i think once some agreement on phase one of the trade deal is announced which is likely in the 11th hour i think we will see a drop in long term bond value and gold ... i am hoping to use that as my re-entry point rebuying what i had sold yesterday for thousands less .

had the fed merely said they are holding rates that would be a positive for bonds , but they coupled it with saying they will allow inflation to creep higher than the 2% target . that is a negative for bonds

yes , i am a dirty lil market timer when it comes to the pp as it is actually my variable portfolio
mdwilson1991
Associate Member
Associate Member
Posts: 39
Joined: Wed Dec 11, 2019 3:46 pm

Re: Help me get over my fear of LTTs

Post by mdwilson1991 » Thu Dec 12, 2019 6:08 am

Pet Hog wrote:
Wed Dec 11, 2019 7:30 pm
...I like to consider the numbers when thinking about these things. Thirty-year treasuries have a yield of about 2.25% today. They have a duration of about 20 years. There's a rule of thumb that duration can be considered approximately equal to the percentage movement of bond value in response to a 1% move in interest rates. Let's say interest rates go up dramatically -- say by 4% in the next 12 months. That's four 1% moves, each time decreasing the bond value by about 20% (i.e., retaining only 80% of the value). That compounds to about 40% bond value after a year. If you have a PP originally worth $400,000, then the $100,000 in LTTs would go down to about $40,000 when the LTT rate reaches 6.25%. Total portfolio value would be $340,000 (assuming no responses from gold, stocks, and cash -- in actuality I'd expect them to soften the blow). That's a PP loss of 15%. Bad by PP standards, sure, but not that bad by traditional investing standards. You'd rebalance by buying $45,000 of new LTTs; you'd now own $85,000 in LTTs earning 6.25%. If rates go down from there, you'll do well; if they go up further, at least you'll be offset by those juicy coupon payments.
Does this same logic hold regardless if I am buying a bond fund (eg, TLT or FNBGX) instead of direct bonds?

That is, when I rebalance into a fund that has dropped that much over one year due to rising rates, will the fund itself have rebalanced into higher coupon bonds?
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Help me get over my fear of LTTs

Post by mathjak107 » Thu Dec 12, 2019 8:26 am

yes , it is the same .

hypothetically lets suppose you bought a treasury bond fund and to keep it simple lets say the funds duration is 5 years ...

so you buy at 10 bucks a share and 5% interest ...rates climb to 6% so nav falls to 9.50 but for 5 years now the fund pays 6% not 5% ... the extra 1% interest over 5 years give\s you back the deal you had the day you bought ..

but remember you are getting 5% in a 6% world .
Pet Hog
Executive Member
Executive Member
Posts: 257
Joined: Tue May 28, 2013 4:08 pm

Re: Help me get over my fear of LTTs

Post by Pet Hog » Thu Dec 12, 2019 1:19 pm

I agree with mathjak that it's the same. TLT holds 38 different bonds in a ladder. See the Portfolio/Holdings section here. Buying that ETF is akin to you holding the same ladder. It shouldn't make a difference if you rebalance your PP by buying treasuries directly or buying them through TLT.

There is, however, a difference between you rebalancing your PP and the fund itself rebalancing into higher-coupon bonds. The latter is a slow process, a decade long, where they sell the 20-year maturity bonds and buy new 30-years (maybe more complicated than that if we consider inflows and outflows). In my example, TLT would presumably lose approximately 60% of its value, bringing its yield up to 6%-ish, so you would buy $45,000 of it in one go and get that yield for your LTT holdings.
Kbg
Executive Member
Executive Member
Posts: 2815
Joined: Fri May 23, 2014 4:18 pm

Re: Help me get over my fear of LTTs

Post by Kbg » Sun Dec 15, 2019 5:06 am

Buy ITTs, skip the cash.
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Help me get over my fear of LTTs

Post by mathjak107 » Sun Dec 15, 2019 5:27 am

Pet Hog wrote:
Thu Dec 12, 2019 1:19 pm
I agree with mathjak that it's the same. TLT holds 38 different bonds in a ladder. See the Portfolio/Holdings section here. Buying that ETF is akin to you holding the same ladder. It shouldn't make a difference if you rebalance your PP by buying treasuries directly or buying them through TLT.

There is, however, a difference between you rebalancing your PP and the fund itself rebalancing into higher-coupon bonds. The latter is a slow process, a decade long, where they sell the 20-year maturity bonds and buy new 30-years (maybe more complicated than that if we consider inflows and outflows). In my example, TLT would presumably lose approximately 60% of its value, bringing its yield up to 6%-ish, so you would buy $45,000 of it in one go and get that yield for your LTT holdings.
an individual bond has a fixed value and fixed yield , a fund has a variable value but a variable yield that can offset the same difference ..

you must hold a long term bond until maturity to see the deal you originally bought if rates rise , that is no different then holding a fund for its duration to see the deal you bought in at .

hypothetically a 5 year 1k bond paying 5% , will fall to 950 with a 1% rise in rates if you sell early . so you need to hold 5 years to see 5% ..

a bond fund will do the same thing , 100 shares at 10 bucks a share and a duration of 5 years will fall to 9.50 a share but rates will go to 6% from 5% . over the 5 years the extra 1% makes you whole again .. it is the same as the bond .

stretching things out longer has the same relationship . a funds duration is pretty much like maturity in a bond .
Pet Hog
Executive Member
Executive Member
Posts: 257
Joined: Tue May 28, 2013 4:08 pm

Re: Help me get over my fear of LTTs

Post by Pet Hog » Sun Dec 15, 2019 11:44 pm

mathjak107 wrote:
Sun Dec 15, 2019 5:27 am
Pet Hog wrote:
Thu Dec 12, 2019 1:19 pm
I agree with mathjak that it's the same. TLT holds 38 different bonds in a ladder. See the Portfolio/Holdings section here. Buying that ETF is akin to you holding the same ladder. It shouldn't make a difference if you rebalance your PP by buying treasuries directly or buying them through TLT.

There is, however, a difference between you rebalancing your PP and the fund itself rebalancing into higher-coupon bonds. The latter is a slow process, a decade long, where they sell the 20-year maturity bonds and buy new 30-years (maybe more complicated than that if we consider inflows and outflows). In my example, TLT would presumably lose approximately 60% of its value, bringing its yield up to 6%-ish, so you would buy $45,000 of it in one go and get that yield for your LTT holdings.
an individual bond has a fixed value and fixed yield , a fund has a variable value but a variable yield that can offset the same difference ..

you must hold a long term bond until maturity to see the deal you originally bought if rates rise , that is no different then holding a fund for its duration to see the deal you bought in at .

hypothetically a 5 year 1k bond paying 5% , will fall to 950 with a 1% rise in rates if you sell early . so you need to hold 5 years to see 5% ..

a bond fund will do the same thing , 100 shares at 10 bucks a share and a duration of 5 years will fall to 9.50 a share but rates will go to 6% from 5% . over the 5 years the extra 1% makes you whole again .. it is the same as the bond .

stretching things out longer has the same relationship . a funds duration is pretty much like maturity in a bond .
Perhaps I'm misunderstanding, but doesn't this argument hold only if the bonds in the fund are held to maturity? What does it mean to hold TLT for its duration when the fund managers sell any bond of maturity less that 20 years?
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Help me get over my fear of LTTs

Post by mathjak107 » Mon Dec 16, 2019 2:04 am

no , a funds duration is the average of all the bonds traded or not ...
User avatar
vnatale
Executive Member
Executive Member
Posts: 9422
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Help me get over my fear of LTTs

Post by vnatale » Sat Mar 14, 2020 6:00 pm

Pet Hog wrote:
Wed Dec 11, 2019 7:30 pm
Hi mdwilson1991

In my opinion, an important part of investing in the PP or GB is considering the performance of the total portfolio, as a whole, and not that of its individual components -- one or more of which will inevitably be sucking at any one time. Perhaps it will be LTTs that will suck in the next few years. Who knows? Try not to fall in or out of love with any of the assets.

Are we in a low-rate environment? Historically, yes. But in a few years we might look back fondly at LTT rates of 2.25% as the good old days. For decades people have been saying that LTT rates have nowhere to go but up. The "low" rates today reflect the consensus opinion of all the investors in the world. So that means rates are neither low nor high, but just right for today's economic conditions, as best as we can judge.

If, however, rates do go up, that means that the value of existing LTTs will go down, and the PP investor will be buying more of them as the lagging asset (either when adding new funds or rebalancing). The investor will now have LTTs earning a higher rate. That's a benefit going forward.

I like to consider the numbers when thinking about these things. Thirty-year treasuries have a yield of about 2.25% today. They have a duration of about 20 years. There's a rule of thumb that duration can be considered approximately equal to the percentage movement of bond value in response to a 1% move in interest rates. Let's say interest rates go up dramatically -- say by 4% in the next 12 months. That's four 1% moves, each time decreasing the bond value by about 20% (i.e., retaining only 80% of the value). That compounds to about 40% bond value after a year. If you have a PP originally worth $400,000, then the $100,000 in LTTs would go down to about $40,000 when the LTT rate reaches 6.25%. Total portfolio value would be $340,000 (assuming no responses from gold, stocks, and cash -- in actuality I'd expect them to soften the blow). That's a PP loss of 15%. Bad by PP standards, sure, but not that bad by traditional investing standards. You'd rebalance by buying $45,000 of new LTTs; you'd now own $85,000 in LTTs earning 6.25%. If rates go down from there, you'll do well; if they go up further, at least you'll be offset by those juicy coupon payments.

Have we instead reached the "good old days" only abou5 3 months after you wrote the above??!!!

Vinny
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."
User avatar
vnatale
Executive Member
Executive Member
Posts: 9422
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Help me get over my fear of LTTs

Post by vnatale » Sat Mar 14, 2020 6:09 pm

Kbg wrote:
Sun Dec 15, 2019 5:06 am
Buy ITTs, skip the cash.
I don't think this is the first time I've read in the forum you advocating that.

For how long have you been doing that?

And, is anyone else doing it, i.e., not doing both cash and long-term treasures but, instead, replacing them both with one intermediate-term treasuries?

Vinny
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."
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Help me get over my fear of LTTs

Post by mathjak107 » Sat Mar 14, 2020 6:20 pm

There is a big difference between using long term and short term bonds vs intermediate term ..

Long term bonds trade not only on rates but greed ,fear and perception.....the moves in long term treasuries can be insane ....we just saw 8-9% moves in a week ... intermediate term bonds are much more subdued at volatile times
pmward
Executive Member
Executive Member
Posts: 1731
Joined: Thu Jan 24, 2019 4:39 pm

Re: Help me get over my fear of LTTs

Post by pmward » Sat Mar 14, 2020 7:12 pm

They perform so similar that I personally see intermediates as a perfect substitute for a long/short barbell for anyone that is afraid of LTTs or anyone that values the simplicity of having one less asset class: https://www.portfoliovisualizer.com/bac ... tion3_2=50

My 401k I have to hold in intermediates as I do not have enough IRA space for all of the long bonds I would need to do a full 100% barbell. But I do keep my LTT's balanced to my cash holdings. I don't lose sleep over it. Long term treasuries do tend to pack a little more oomph in short term crisis' like this one, but over the long term you can see they are pretty much identical as eventually LTT's will sell off more than intermediates. The downfall of intermediates exclusively is you lose the liquidity of having cash in your portfolio. But one could also do a hybrid, holding enough in a barbell to satisfy liquidity needs and the rest above that in intermediates.
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Help me get over my fear of LTTs

Post by mathjak107 » Sun Mar 15, 2020 2:57 am

i don't show that at all , when fear , greed and perception take over ........

when markets rock the combo of tlt and shy are much more volatile

last week a combo of shy and tlt saw a drop of 3.89 and for the last 3 months a drop of 6.81

IEF getting all the money fell 2.53% last week and just 5,91 the last 3 months .

500k in shy and tlt fell 38,900 last week

1,000,000 in ief fell 25,300

long term averages don't count with assets designed to react very aggressively when it is called upon when you have the bulk of your assets accumulated .

going back to the 1970's , 1980,s mean little to us individually .... heck i grew up in the greatest bull market in history in the 1980's . but few of us regular people had much money invested yet . so the fact an asset shows a huge jump is irrelevant since it is only relevant to how much at the time is invested

today , even a 7% drop wipes out a decade of 401k contributions at catch up .....

so because of sequencing risk what assets do short term is a lot more meaningful than looking at decades .

so i would not consider the volatility of those two the same at all , nor the falling and lifting ability ... the combo is going to be far more volatile and the more accumulated the bigger the effect
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Help me get over my fear of LTTs

Post by dualstow » Wed Mar 18, 2020 10:55 am

TLT dropping at least 2.5% again. Well, I'm grateful for the interest payments.
RIP Marcello Gandini
User avatar
vnatale
Executive Member
Executive Member
Posts: 9422
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Help me get over my fear of LTTs

Post by vnatale » Thu Apr 23, 2020 7:09 pm

mdwilson1991 wrote:
Wed Dec 11, 2019 4:04 pm
Hi folks,

I've been reading here a while, read Best Laid Plans, Rowland's book. I've been trying to pull the trigger and move to the PP or a variation, like GB.

I can't seem to get past my fear (perhaps irrational ) of the long term treasuries.

I know stocks can crash and stay there for ages. But somehow the fact that bond returns are inverse to interest rate movements, coupled with us being in a low rate environment really makes long bonds scary.

I don't currently hold TLT or an equivalent, and the thought of dumping 20+% into it and watching it get crushed for the rest of my life if rates move up...

I try to think of it in terms of stocks - they can move rapidly down as well, but they don't have that direct tie to the interest rate environment we are in.

Can anyone offer some words to help me calm my fears? Thanks---
Is this one of the Permanent Portfolio's "life lessons"?

The day this post was written (December 11, 2019) TLT's price was: $139.75. Today 170.44. A 21% increase in four months!

Vinny
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."
stuper1
Executive Member
Executive Member
Posts: 1365
Joined: Sun Mar 03, 2013 7:18 pm

Re: Help me get over my fear of LTTs

Post by stuper1 » Thu Apr 23, 2020 8:33 pm

It certainly is one of the lessons. People now will look at the price today and say that it has only one direction to go -- down. However, the PP is agnostic and believes it has a 50/50 chance of going either direction. In other words, the market price is reasonably efficient. Half the market thinks it will go up; half thinks it will go down.
User avatar
vnatale
Executive Member
Executive Member
Posts: 9422
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Help me get over my fear of LTTs

Post by vnatale » Thu Apr 23, 2020 8:37 pm

stuper1 wrote:
Thu Apr 23, 2020 8:33 pm
It certainly is one of the lessons. People now will look at the price today and say that it has only one direction to go -- down. However, the PP is agnostic and believes it has a 50/50 chance of going either direction. In other words, the market price is reasonably efficient. Half the market thinks it will go up; half thinks it will go down.

So much wisdom you conveyed with just a handful of sentences!

Vinny
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."
stuper1
Executive Member
Executive Member
Posts: 1365
Joined: Sun Mar 03, 2013 7:18 pm

Re: Help me get over my fear of LTTs

Post by stuper1 » Thu Apr 23, 2020 8:41 pm

Haha, I'm just trying to convince myself to hold onto my TLT and even EDV. Every fiber of my being is telling me to sell, especially the EDV, but I just keep telling myself that bond yields can still go lower than they are today. And in fact it would not be a surprise given current events.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Help me get over my fear of LTTs

Post by dualstow » Thu Apr 23, 2020 9:17 pm

See? You still have a few fibers telling you not to sell.
RIP Marcello Gandini
mdwilson1991
Associate Member
Associate Member
Posts: 39
Joined: Wed Dec 11, 2019 3:46 pm

Re: Help me get over my fear of LTTs

Post by mdwilson1991 » Fri Apr 24, 2020 9:50 am

vnatale wrote:
Thu Apr 23, 2020 7:09 pm
mdwilson1991 wrote:
Wed Dec 11, 2019 4:04 pm
Hi folks,

I've been reading here a while, read Best Laid Plans, Rowland's book. I've been trying to pull the trigger and move to the PP or a variation, like GB.

I can't seem to get past my fear (perhaps irrational ) of the long term treasuries.

I know stocks can crash and stay there for ages. But somehow the fact that bond returns are inverse to interest rate movements, coupled with us being in a low rate environment really makes long bonds scary.

I don't currently hold TLT or an equivalent, and the thought of dumping 20+% into it and watching it get crushed for the rest of my life if rates move up...

I try to think of it in terms of stocks - they can move rapidly down as well, but they don't have that direct tie to the interest rate environment we are in.

Can anyone offer some words to help me calm my fears? Thanks---
Is this one of the Permanent Portfolio's "life lessons"?

The day this post was written (December 11, 2019) TLT's price was: $139.75. Today 170.44. A 21% increase in four months!

Vinny
You are absolutely right it is a lesson. No one has any idea WTF will happen. Fortunately (at the moment ;) ) I took the plunge and bought FNBGX,which is in my view pretty equivalent to TLT, before things started to blow up.

Will that turn out to be a good idea? Who knows. Plenty of people are saying bonds are going to be crushed. Others say they will be the vehicle for flight to safety, at least until gold takes over.
Post Reply