Bonds are compelling as collateral
Ever since 2008, the world shifted more to the world of collateral and distrust, after the world of unsecured collapsed.
Treasuries are dollars are in the future. As long as uncertainty remains high (or increases) there will be a place for government loans. Treasuries yielding near 5% on most maturities is "good enough" when compared to the historical 7% ish from equities.
Technically speaking, treasuries may be forming a short term bottom.
Tactically speaking, the gap between treasuries and stocks is very wide.
Fundamentally speaking, there may not be enough reward to justify most large cap equities current yield when compared to the healthy yield in treasuries.
Risk speaking, the biggest risk in holding treasuries is the loss in opportunity and the risk of more dollar devaluation/consumer inflation loss of purchasing power.
In summary, Treasuries are worth a shot and they are likely de-risked at current levels.
I will be considering bullish option spreads.
Treasuries are dollars are in the future. As long as uncertainty remains high (or increases) there will be a place for government loans. Treasuries yielding near 5% on most maturities is "good enough" when compared to the historical 7% ish from equities.
Technically speaking, treasuries may be forming a short term bottom.
Tactically speaking, the gap between treasuries and stocks is very wide.
Fundamentally speaking, there may not be enough reward to justify most large cap equities current yield when compared to the healthy yield in treasuries.
Risk speaking, the biggest risk in holding treasuries is the loss in opportunity and the risk of more dollar devaluation/consumer inflation loss of purchasing power.
In summary, Treasuries are worth a shot and they are likely de-risked at current levels.
I will be considering bullish option spreads.
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