Bond yields keep rising. Financial journalists sprint to explain what this means for "income investors." Income investors being the polite term for retirees who discovered bonds exist approximately six weeks ago.
Treasury yields reached multiyear highs. The article promises winning moves. Winning moves in fixed income. That's like promising winning moves in watching paint dry. The paint either dries or it doesn't. You either get your coupon or the government collapses. Not much strategy involved.
The premise assumes retail traders can time bond markets. These are the same people who bought Peloton at $167 because their neighbor lost eight pounds. Now they're supposed to ladder maturities and calculate duration risk. They can't calculate a tip without their phone.
Employ these winning moves. Love that verb. Employ. Like you're hiring the moves to work for you. "Sorry, Winning Move #3, we're letting you go. You're just not a cultural fit for our portfolio." Winning Move #3 was buying thirty-year bonds at 1.2% in 2020 because some guy on YouTube said inflation was fake.
The article targets income investors who need yields explained when rates hit multiyear highs. If you didn't understand bonds when the ten-year was at 0.5%, you sure as f*ck don't understand them now at 4.8%. But please, employ those winning moves. Employ them hard.
Best part is the urgency. Take advantage of the moves. The moves being rates that change slower than continental drift. Treasuries moved up over eighteen months. But sure, rush into your winning strategy before this lightning-fast trend gets away from you.
Income investors already missed the entire rate cycle buying dividend stocks that got obliterated, but at least now they can lock in yields their savings account offered them two years ago for free.
Photo by Tyler Prahm on Unsplash
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