The Treasury Bond Collapse is Real.
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- Опубликовано: 5 июн 2024
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The prices of U.S. Treasury bonds have now collapsed over 50%, and the yield on the 10-year treasuries has hit its highest level since 2007. But is this a problem? For some investors this represents a major economic crisis, but for others, maybe this isn't the financial crisis we should be worried about.
New Money Clips: / @newmoneyclips5744
My Podcast: / theyounginvestorspodcast
★ ★ CONTENTS ★ ★
0:00 The U.S. Treasury Bond Crisis
1:05 How Bond Prices Crash
5:45 How Will This Impact You?
7:10 Who Suffers the Most?
9:00 The Inverted Yield Curve
Brandon van der Kolk is authorised to provide general financial product advice in Australia and is an Authorised Representative Number 1305795 of Guideway Financial Services Pty Ltd, AFSL Number 420367. Any advice is general & does not consider your financial situation, needs or objectives so consider whether it's appropriate for you. Read Brandon's Financial Services Guide available from guideway.com.au/NewMoney.pdf. Past performance is not a reliable indicator of future investment returns.
Contact email: hello@newmoney.contact
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Hey buddy, good video. However I think you are missing the bigger picture. China recently changed their management team in their Central bank and they are dumping U.S securities. With U.S provoking China over Taiwan I believe China will continue to dump U.S Securities. the middle east and Russia are also very upset with the U.S for obvious reasons. I think the long term outlook for America to maintain its current system is very slim, this should be priced in too.
A failing U.S. economy and elevated global tensions reduce the likelihood of prolonged inflation or higher long-term Treasury yields. I've seen folks amass up to $1m amid crisis, and even pull it off easily in a favorable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich
I do not disagree, there are strategies that could be put in place for solid gains regardless of economy or markt condition, but such executions are usually carried out by investment experts or advisors I speak from experience.
Yeah, financial advisors could make a lot of difference, particularly in a market such as this. Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look. I have been using an FA since 2020, and I return at least $30k ROI, and this does not include capital gain.
Would you mind telling me how to contact this specific coach using their service? You seem to have the solution, as opposed to the rest of us.
I've shuffled through investment coaches and yes, they can be positively impactful to an individual's portfolio, but do your due diligence to find a coach with grit, one that withstood the 08' crash. For me, Natalie Lynn Fisk turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
Thanks, I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get.
I'm concerned about a potential treasury bond collapse and its impact on my $500,000 bond investment, mostly in 10-year bonds. My stock portfolio recently took a hit, losing nearly $150k, making it a turbulent experience.
I share your concerns. A Treasury bond collapse could lead to rising interest rates, and that could negatively impact bond prices. I would suggest you employ the services of an investment advisors with experience since the 08' crash
A lot of folks downplay the role of advisors until being burnt by their own emotions. I needed a good boost to help my business stay afloat, hence I researched for fiduciary CFP and came across someone of due diligence, helped a lot to grow my reserve notwithstanding inflation, from $275k to approx. $850k so far.
I take guidance from ’THERESA DANA PEEK’ a well qualified Florida-based CFP with over a decade of experience, luckily her profile is widely visible on the internet, you should simply research.
The financial sector and derivatives may have a Hindenburg moment if the US Treasury market collapses.Rising market illiquidity in the $14.8 trillion U.S. Treasury market, according to Bank of America, might affect other financial markets.
We face a new challenge every day. The new normal is this. We now see that this is the new normal and must adjust, having initially believed it to be a catastrophe. Across the country, this year will be quite painful economically.
I completely agree, which is why I prefer delegating daily decision-making to an investment coach. It is nearly difficult for them to perform below par given their specialised knowledge, extensive research, and the fact that every ability they possess is focused on maximising risk for its asymmetrical potential and minimising it as a safety net against certain unfavourable turns. I've worked with an investing coach for over two years and have made over a million dollars.
@@Dannyholt33 Please can you leave the info of your invstment analyst here? I need such luck
There’re a lot of financial coaches but “Vivian Carol Gioia” has shown credibility and professionalism over the years. That’s why I can boldly recommend her
Thanks, I just googled her and I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.
We can't ignore the potential impact on portfolios. Bonds are often considered a safe haven, and if they crumble, investors like me might scramble. I’ve been investing for 11 yrs and my $1m portfolio has never been this depleted, how i do hedge this?
In fact, markets have incorrectly priced in such a pivot six times over the last two years, according to Deutsche Bank, which sounded cautious about this seventh time. Still showing us why pointers from market experts are essential
A lot of folks downplay the role of advisors until being burnt by their own emotions. I needed a good boost to stay afloat, hence I engaged the services of a true market strategist to help rejuvenate my $700k portfolio and boost performance and returns by 40% in a little over four years.
@@Jadechurch-ql3do Please can you leave the info of your lnvestment advsor here? I’m in dire need for one
I'm been guided by “Leila Simoes Pinto’’ who is widely recognized for her competence and expertise in the financial market. She has a thorough understanding of portfolio diversification and is regarded as an authority in this field.
I took a long hard look at the 60-40 ratio and decided it was dumb when interest rates are historically low. It's a lose-lose. At best, your bonds get a horrible return, and at worst, the bonds crash if rates rise. In my IRA I went 70-30 stocks & cash (to buy dips) and that's worked out way better.
Engaging in an individual market option is fair
but its performance level can’t generate high dividends. Diversification is the secret to optimal performance, that’s why I have my interest set on options based on projected growth and performance.
can you explain in full on the market options you’re into, i’m curious•
When it comes to finance growth, it’s wrong to engage in a single option. I suggest diversifying into various options with high performance coupled with the experience and aid of a finance Pro will generate bigger dividends and balance volatility.
”Do not lay your eggs in one basket.” I engage on various options (real estate, real assets, index/mutual funds, ETFs, annuities, lDOs and many others) with the aid of my finance pro, and so far have acquired so much (amount is confidentiaI)
sear ch the full name below, if you care
IsabeIIe ChIoe Scott
Ironically, now is the time to buy bonds
Time for New Money to release this video before it becomes too outdated 😊
Let us bond in these times 😂
@larrygerry984 100% whats your 1 year plan?
Guessing, rates stay around the same until around 3rd 1/4 of 2024, then rates will go down, (just in time for the elections), that will send housing and stock markets 📈📈
Not sure it’s the optimal plan but I’m currently positioning towards
50% short term bond/money market, 30% Large Cap stocks, 20% long bonds and possibly back heavy percentage into Large Caps as rates start coming down
Indeed the capital gain to be had from buying these braten down bonds must be indane especially the > 10 years
Never catch a falling knife..
Great explanation, thank you
The problem with bonds is owning them in a fund as you can’t hold to maturity
As always, extremely well explained. Thank you for making such informative videos. A lot of people could benefit from them.
Great educational video! Thanks
If you want stability, buy bonds. If you want to speculate on changes in the yield rate, buy shares of a bond ETF.
The problem is that many investors thought that bond fund is fixed income.
Best explanation ever. I never understood inverted yield until I watched this video.
Best explanation I have heard. Nice job.
Very well explained, thank you!
I was aware of all this, but you explained it so much better than I ever could've 👍
Thank you!
Bro, your comments section is being overrun by bots. @@NewMoneyRUclips
Very informative. Thank you.
LOVE your videos. Thank you!
not much sympathy for buyers of bonds when interest rates are 0.1%
which way did they expect rates to go!?!
thanks for the money wisdom chad money
Super Great Explanation. Thank you as always
Excellent, succinct explanation. Thank you.
Brilliant video and very well explained 👌
very concise thanks.
Buying an individual stock is a fair investment but its performance level can’t generate high dividends. Diversification is the secret to optimal performance, that’s why I have my interest set on options based on projected growth and performance.
Good approach; diversifying is really key to finance growth. can you explain in full the lnvestment options you’re into, I’m curious•
When it comes to finance growth, it’s wrong to engage in a single option. I suggest diversifying your portfolio into various options with high performance coupled with the experience and aid of a finance Pro will generate bigger returns and balance volatility.
”Do not lay your eggs in one basket.” I engage on various options (real estate, real assets, index/mutual funds, ETFs, annuities, potential stocks and cry-pto, IDOs and many others) with the aid of my finance pro, and so far have acquired so much returns (amount is confidentiaI)
sear ch the full name below, if you care
•Rebecca Martin Watson•
I didn't understand the whole SVB bond thing until this video. Thanks!
Great way to break it down❤
In my taxable account I went into dividend investing route. In my Roth I did the buy and hold route with an S&P 500 etf and total market etf along with some Berkshire B stock and SCHD.
The 1% of rich people think of how to invest their money to increase their wealth during the recession. While 99% of struggling hard-luck people think of how to survive without food and daily necessities in the recession and the coming hyperinflation
It’s always good to have a financial plan. I work with a licensed planner and fixed-income strategist in LA that helps me sort out these plans of investments
Great video Brandon, as always!
One of the best explanations for the layman when it comes to the bond market. Thank You for your efforts.
-- Elmina, Malaysia
not sure why someone in 2020 would ever buy a bond that gives you 2% interest rate and get your money stuck for 10 years...
Good explanation for those who need some of the basic facts. The most appropriate "strategy" for most UST bill/note/bond investors is to construct a "ladder". I have done this and every week or so a T-bill, note or even bond matures. The principle and interest are then reinvested to maintain the cash flow and structure of the "ladder". I never sell and thus avoid any potential loss as long as the world's financial system remains intact. The unexpected need for funds does not necessarily require the sale of bonds at unfavorable prices thus incurring loss. One can use a bond portfolio as security for a security-backed line of credit (SBLOC). Depending on the use of such funds, the interest paid may even be tax-deductible.
Wow, thanks for that extra insight!
@@NewMoneyRUclips You're welcome.
There is no good reason for individuals to hold low yielding bonds ten years to maturity, just sell them at a loss, deduct it from your taxes, and rebuy new bonds with good yields
I love your videos.
The bit about the inverted yield curve was not clear. Please dedicate a video for it.
When it comes to discounted bonds is this referring mostly to corporate bonds or previously bought treasury yields? If it's the latter are the bond payouts determined by the government still or the entity that sold the bond at a discount?
This is by far the best RUclips channel when it comes to investing. I can’t thank you enough. I’ve followed new money for about 6 months now and I can finally understand the market after 2 whole years of losses. And things are looking good now only thanks to NM. Thanks 🙏 once again
One of the best explainers about the bond market I've yet seen
Thanks Adam!
Great explanation 👍👍
I finally get this. Thank you for explaining it in a way I could understand.
You should create reading list in blinkist that covers a good view of bonds. I'd read (or blink) it.😊
RUclips has become crazy popular. Now even Mark Zuckerberg's younger brother has a channel!
Does the point of 9:55 only goes for secondary or also for primary market?
Very educational.
Thanks, good explaination. I got out of long term bonds and stick to short term T-bills.
Super helpful info. Thanks as always!
Excellent video as always. Thanks.
It'd be nice if you covered the same topic from the perspective of someone getting in today or soon.
great video
Thanks for an approachable explanation of bonds. They're not something I deal with, so I had a very limited understanding of them.
As we approach year-end, maybe a similar vid on details around selling stocks at a loss at year end to save on taxes?
Here in the US that's called tax fraud 😂
@@user-ej1bq4bq2w Tax loss harvesting. You can use it to offset gains and up to $3000 of earned income per year. IRS is cool with it but beware the "wash sale" rule. It's value depends on a lot of factors. We don't make that much and we usualy hold brokerage stocks "long" so our cap gain rate is 0% anyway. We have a small loss that will help with our regular income though. Working inside to rules our fed taxes were about 3% last year so we'll save maybe $100? That'll about cover Tax Act.
Im confused if the fed is saying they will keep rates higher for longer wouldnt the big banks buy short dated bonds at that point? As theres no indication that rates are gonna come down soon so may aswell keep rolling them over until theres a sign from the fed that theyre gonna drop rates then you lock in the long dated bonds?
I
Thanks Brandon. That's the best explanation of how bond market prices can vary with interest rate rises that i have heard. Ditto for your explanation of inverted yield curves.
This seems like a great opportunity if you can get in at the right price. But how do I buy these bonds in Australia?
Can I buy cheap bonds and just wait for them expire? Receiving the principle in full?
nice content... easy to understand
I just signed up for your Blinkist hopefully it will be beneficial.
So we should not buy bond etf? like BNDX
As a bond noob, does the annual interest compound annually, or is it a simple interest annually?
If you hold an actual bind bought from government the income is paid to you and does not compound. If you buy a bond etf or fund some are accumulating.
Thank you for explaining inverted yield curve. I think I now not only understand its cause, but also its effect on the bond market. I also now understand why the feds decision to continue high interest rates for some time leads to investors opting for short term bonds, causing yields to ride on long term bonds. This such a fascinating topic.
I did not like your video, I loved it. Good job man.
SVB’s risk manager was more concerned with staff diversity initiatives, than portfolio diversity
The only thing down in my portfolio is some bonds I bought in Jan, Mar, and Jul 😅
sounds like good time to up bont etf posittion
You didn’t touch in bond ETFs that don’t have an expiration date. Most small investors don’t buy T bills or gilts direct from the government.
Engaging in an lndividual market option is a fair but its performance level can’t generate high dividends. Diversification is the secret to optimal performance, that’s why I have my interest set on options based on projected growth and performance.
can you explain in full the market options you’re into, i’m curious•
When it comes to finance growth, it’s wrong to engage in a single option. I suggest diversifying into various options with high performance coupled with the experience and aid of a finance Pro will generate bigger dividends and balance volatility.
”Do not lay your eggs in one basket.” I engage on various options (real estate, real assets, index/mutual funds, ETFs, annuities, lDOs and many others) with the aid of my finance pro, and so far have acquired so much (amount is confidentiaI)
sear ch the full name below, if you care
IsabeIIe ChIoe Scott
If we are candid about it there is no possibility of 330 million Americans could repay the $34 trillion debts in their life time because it averages more than $100,000 per person.
The worst of it is that not only the US government has no intention to repay the debt it even has no intention to "reduce" the national debt but actually continue to spend money like a drunken sailor!
The politicians all learn to play this game. The term of office is just four years so everyone goes for popular policies to spend money the government hasn't got and let the next and future government to pay the bill.
Excellent presentation 👏
The message here for low interest bond holders:
Stop smoking
Stop over eating
Start walking every day
Avoid any activity/personal involvements that incur sudden expense.
Live long and cash in your bonds at full maturity
So you're saying Blinkist subscription and treasury bonds are both 60% off at the moment?😅
No wonder Warren Buffet said years ago he does not like long term treasury bonds.
The bonds cannot become worthless, Treasury has the legal right to print as many dollars as needed to honor them and by law MUST do so. The Federal Reserve aside as they manipulate asset prices in favor of the wealthy the Treasury cannot allow bond issues to fail. That does not mean their buying power is not reduced to Argentine levels of irrelevance, but the average member of the public does not even know there is an inverse relationship between a bond's price and the interest paid. They do not understand that a bond is the same thing as money, that debt is part of the accountancy of assets. In double entry bookkeeping all assets and liabilities must equal zero, so the more debt that is out there the more assets that are out there. Those railing against debt just do not understand that for every $1 of assets there must be $1 of debts. Of course how those assets and liabilities are distributed is a major problem and one the US is just grossly failing at. As of July this year the top 10% of households by net worth held 88.7% of all stocks and bonds, more than half of stocks and bonds are held by the top 1%. These are driving wealth inequality in two ways, one they provide UNTAXED income in the form of carried interest, and because capital gains are not taxed until they are sold and the gain is taken as income, and by by dividends and share buybacks and splits that are reinvested thus increasing wealth without ever being called income.
Bond yields had been falling recently, so recent buyers might actually have done well...they've been pretty volatile though and could whipsaw with inflationary data prints...
The ongoing sell-off in bonds and worries about an escalation in Middle East hostilities are weighing on the market, as it waits for Big Tech companies to fire up earnings season this week. I want to invest more than $300k, but not sure on how to mitigate risk
The uncertainties accompanying this present market is more reasons I have my daily investment decisions guided by a portfolio-coach seeing that their entire skillset is built around going long and short at the same time, both employing profit-oriented strategy , coupled with the exclusive analysis, it's quite impossible not to outperform. Netted over $550k in return on investment.
Impressive! I've actually been looking into advisors lately, the news I've been seeing in the market hasn't been so encouraging, who's the professional coaching you?
My consultant is *Alicia Estela Cabouli*, I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provided entry and exit points on the securities I focus on. You can look her up online if you care supervision. I basically follow her trade pattern and haven’t regretted doing so.
Reading JP, such a King!
Everyone needs more than their salary to be financial stable. The best thing to do with your money is to invest it rightly, because money left for saving always end up used with no returns.
Wow buddy, that's more than a mouthful of profits you're making. How do you achieve this feat consistently? You must be a genius in trading.
Sarah O'Neill her trading strategies are top notch coupled with the little commission she charges on her trade.
My coin stays right in my trading account, my account just mirrors her trades in real-time.that's the idea behind copy trading.
Have never made 20% of my $15,000 worth of bitcoin once ever since I started hold from August.
Her concept is key in beating all odds to excel in this form of online commodity trading.
Damn. This is a dense topic. I’m going to need to watch like 100 more videos before I decide to buy bonds again.
bonds being sold off is good for those who are buying now for short term tho
Also one may sell the bond, take a loss and buy a similar bond but different so the get a loss for now that they can take against future gains…. And buy a similar bond and if they are smart they will buy one so they get their full principle back😊😊
“Not everybody can hold onto their bonds until maturity…”, then why did they buy them? They either purchased them to hold through maturity or were playing the trading game, which they lost. Great vid!
I’ve got a couple of good ETFs in my portfolio and I still got other share holdings doing incredible numbers. I’m up 47% YTD! I’m also well positioned with good blue chip companies and I have stop losses in place.
Amazing well done! Which companies have performed best for you?
Thanks and all the best on your investing journey. Personally with insights from my consultant I prefer to invest in large cap companies which have economic moats, large cash flows and strong balance sheets. Some of which are AAPL, MSCI, IUKD, VHYL, SCHD, NVDA and Barclays…
Geez, strong performance in 2023. Congrats! Kick down those Wall Street doors
I’d say your IA is doing a great job protecting your portfolio. More still impressive as you’re making fortunes in these turbulent times!
I’d choose expertise any day because finding the right balance between investing and living is very important to me.
Everything has risk. Locking short term money in a long term bond was taking a risk. There are news articles because the banks got greedy and will be looking for another bailout.
Banks put your money in the shifty low paying bonds, now you go in to make a withdrawal and the bank has to sell the bonds at a 50% LOSS to give you your money and the bank collapses.
It’s a mark to market problem dude… the face value is still there, you jus t have to wait a decade to cash it in
Yes but those folks buying an ETF are not buying bonds they are buying an ETF. Yes non-issue, don’t buy a bond if you can’t hold to maturity!!!
0% chance we let the bond market collapse. We will just increase incentive.
Enjoy holding bonds with an average of 4% inflation per year....
Bro’s been hitting the gym
Wouldn't that impact on stock market too?
bonds on a banking book are supposed to be hedged with IRS, only dumb bank would hold a long term bond outright
THIS used to be one of my most watched YT channels... sadly, it's been a while since i visited it has been a very rough year... i am experiencing one of the toughest phases of my life... Lost a fortune lnvesting in emerging companies. Hopeful, for a turnaround.
Oh my poor you
Very interesting content leading to very important question. How can you buy US bonds, as a European for example, when you are neither a US citizen nor have a US tax identification number (social security number)?
"Safe" unless you live in Lebanon, or Greece, or Argentina ....
Stop the ada
So basically Greed caused their pain. Once you agreed to your guaranteed investment then stick to it.
The worlds safest investment is in your own education- like a college diploma in engineering, law, economics or IT etc
Diversity in more than one maturity or just buy T-Bills!!
A significant increase in interest rates by the Fed, and rising Treasury yields all point to additional losses for the economy and the market in general. How can I profit from the present market turbulence because I've lost almost $120K in my portfolio?
It’s good if you keep yourself safe by knowing when to sell stocks in order to limit losses. I advise consulting a CFP or other professional for advice if you are not very savvy.
There are a lot of independent advisors you might look into. But i work with Stacie Lynn Winson and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I support her.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
Safe as the banks in 07/08
Stop the ads
I think I finally understand bonds now after years of not getting it. It’s all about the open market.