Long-dated Treasury yields hit key levels last week. The key level was a number that makes income-seeking investors feel alive again after spending the 2010s earning less than a savings account at a credit union in Duluth.
Financial media rushed to explain that volatility creates opportunities. Volatility always creates opportunities. A meteor strike creates opportunities if you sell tarps. The advice here is that you can "turn up attractive income" by buying bonds while they're doing the financial equivalent of a seizure. Rock solid.
Here's what happened. Yields went up. This means bond prices went down. Investors who bought last month are underwater. But don't worry—the same outlets telling you to buy now were telling you to buy then too. The opportunities never stop. They're like roaches. You kill one and sixteen more show up offering 5.2% for thirty years of counterparty risk with a government that argues about the debt ceiling like it's a divorce mediation.
The piece assumes you're "income-seeking." That's code for old or scared or both. You don't want growth. You want four hundred dollars a month so you can pretend the number in your account means something while inflation turns your purchasing power into a punch line. But sure, lock in that yield. Thirty years. Nothing could go wrong in thirty years. The Treasury has never defaulted if you don't count the time we just changed what the dollar was worth and called it policy.
Retail traders will read this and think they're getting in early. They're not. They're getting in exactly when CNBC tells them to, which is when someone else is getting out. The volatility isn't opportunity. It's the sound of smarter money leaving the room.
Income-seeking investors are just bag holders with a retirement account.
Photo by Hennie Stander on Unsplash
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