Long Term Treasury Bonds Have Inherent Leverage

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Long term treasuries have inherent leverage compared to short-dirt durations. Are they generally superior to more expensive leveraged treasury ETFs? Yes, for some of the reasons we just talked about that they're going to be cheaper and more liquid in particular. And compare that with VGLT or TLT and you'll see they have similar performances over time.

In this episode we answer two looooong emails from Mark and Andreas. We discuss Mark's quandaries with a 457 plan and Andreas's Risk Parity fever brought on by topics that include how to choose ETFs for each asset class, leverage in bond funds, TIPS, a proposed portfolio, other alternatives like long-short, market neutral and options strategies and musings about taxes and currency exposures. And then we conclude with Polo Hofer.

Links:

Father McKenna Center donation page: Donate - Father McKenna Center

Risk Parity Chronicles video tutorial on asset swapping: How to Do an Asset Swap - YouTube

Risk Parity Chronicles series on TIPS: Eight Observations About TIPS (riskparitychronicles.com)

ETF Database: ETF Database: The Original & Comprehensive Guide to ETFs (etfdb.com)

Bloomberg Presentation on Asset Classes in Inflationary Environments: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)

Vanguard Commodities Paper: Commodity investing and its role in a portfolio (vanguard.com)

Antti Ilmanen books: Books by Antti Ilmanen (Author of Expected Returns) (goodreads.com)

EconoMe Conference: EconoMe Conference - March 17th-19th, 2023