Exactly. Essentially, the more stocks you hold, the longer duration (or more of a lower duration) you want on the treasury side. That's why, without leverage, any portfolio with more than 60% stocks should consider LT. At least, that's my unprofessional opinion.Interesting question (VERY interesting, actually). Using 60% equity 40% ten year Treasury portfolios the equity and 10 year Treasury portfolio OUTperforms an equity and 5 year Treasury portfolio by about 95 basis points per year for the last 96 years. The standard deviation of return is 16.3 for the equity/10 year Treasury portfolio vs. only 11.7 for the equity/5 year Treasury portfolio.
I'm confused because that doesn’t seem to be the takeaway from McQ's analysis, so I may be missing something. "Can you do better than BND?" I'm confident that with U.S. treasuries, you can expect to, but the ideal duration really depends on the investor's individual circumstances and goals.
Statistics: Posted by Chocolatebar — Tue Dec 10, 2024 10:54 am — Replies 169 — Views 33352