A year ago we didn’t know the market would grow so much, or at all.
A year ago, the expected annual yield on the NYSE was 6-8%. The treasury return for a year was 4%.
Today we don’t know if these trends will continue, stop, or even reverse.
“I don’t know if my plane will crash, so I drive everywhere in order to avoid that risk”.
The expected yield on market investments is higher than the expected yield on treasuries. The real value in treasuries is their convertibility to cash, hedged against the risk of inflation. You are losing money long term if you are putting your retirement income in treasuries.
The whole point of bonds is that they be more stable
The point of low-yield low-risk bonds is that they can be quickly converted to cash when better investment opportunities arise. Alternatively, to be spent on consumer goods and services.
A year ago, the expected annual yield on the NYSE was 6-8%. The treasury return for a year was 4%.
“I don’t know if my plane will crash, so I drive everywhere in order to avoid that risk”.
The expected yield on market investments is higher than the expected yield on treasuries. The real value in treasuries is their convertibility to cash, hedged against the risk of inflation. You are losing money long term if you are putting your retirement income in treasuries.
The point of low-yield low-risk bonds is that they can be quickly converted to cash when better investment opportunities arise. Alternatively, to be spent on consumer goods and services.