Quanist Investment

LQD and HYG, which is better?

LQD and TLT, which is better?

Now that the US 10-year treasury yield is holding above 4%, making me want to put more money into it. But, after a series of studies, I have some conclusions in mind: US long-term treasury yields are at about 20 years high. Technically, now is the time to buy. The US core PCE is still above 4% and the yield curve is badly inverted. If the Fed hikes more rates and the long-term yields rise to achieve a normal yield curve, the long-term bonds could be very risky. Today, I want to say something good about the US long-term treasury bonds that long-term treasury bonds have a higher chance of beating the short-term ones if held long according to their historical returns. The followings are the target researching ETF: TLT, iShares 20+ Year Treasury Bond ETF. IEF, iShares 7-10 Year Treasury Bond ETF. IEI, iShares 3-7 Year Treasury Bond ETF. TLT VS IEF Performance Comparison Between TLT and IEF Investing for 1 year Investing for 5 years Investing for 10 years IEF VS IEI Performance Comparison B...

HYG and PFF, which is better?

AGG and TLT, which is better?

IEI and VGIT, which is better?

IEF and IEI, which is better?

TLT and IEF, which is better?

IEF and VGIT, which is better?

AGG and VGIT, which is better?

Now the US 10-year treasury yield stands at the 4% level. It feels cheap and it is time to buy. However, other than the chance of the Fed continuing to raise rates slowly, there is one other thing that might trigger the mid to long-term yields to rise, resulting in losses of those bond positions. That is, the inverted yield curve started to move toward the normal curve shape. Even with a slight movement of the curve could result in losses in long-term treasury bonds that investors should not ignore. My basis of argument comes from the technical view on price fluctuation would go in one direction when it has already gone dramatically in the other direction for a while. Of course, this needs the Fed not lowering the rate in the imminent future. How Bad is the Yield Curve Inverting？ I ferreted out all times since 2000 when the yield curves were inverted and found out that today's yield is badly inverted. If we look at the difference between the 1-month yield and the 30-year one, the c...

 I have done some research on US treasury recently. In  this article , I showed how much the US 5-, 10-, and 30-year treasury bonds drop in price if their yields increases. And the results are based on their durations. Today, I took found some periods of time when the US treasury bonds drop in price by more than 10% based on the historical returns. I chose IEI、IEF、TLT to represent short to long-term bonds. IEI: iShares 3-7 Year Treasury Bond ETF. Data range: 2007-01-11 ~ 2023-08-04 IEF: iShares 7-10 Year Treasury Bond ETF. Data range: 2002-07-30 ~ 2023-08-04 TLT: iShares 20 Plus Year Treasury Bond ETF. Data range: 2002-07-30 ~ 2023-08-04 IEI IEI's return was -11.199% investing from  2021-10-26 to 2022-10-25  The US 5-year treasury yield rose 3.01%  from 1.18% to 4.19% during this period.   IEF IEF's return was -6.166% investing from  2008-12-24 to 2009-12-23  The US 10-year treasury yield rose 1.66%...

SPY and IEF, which is better?

This article is about finding IEI's mean return, return standard deviation and Sharpe ratio. The average trading days in a year is 252 days. So if you are interested in looking up IEI's historical average annual return, put in 252 days for investment duration in the following app. 

This article is about risk analysis of TLT. First, I will build an app that will randomly generate investment start date and end date given an investment span. The user has the freedom to set a tax rate on dividends.

This article is about risk analysis of IEF. First, I will build an app that will randomly generate investment start date and end date given an investment span. The user has the freedom to set a tax rate on dividends.

This article is about risk analysis of IEI. First, I will build an app that will randomly generate investment start date and end date given an investment span. The user has the freedom to set a tax rate on dividends.

Now the US 10-year treasury stood at the 4% level, the 20-year one at 4.36%, and the 30-year one at 4.203%, I would like to take a look at their historical charts to see if now is a possible buying point.  The US 5-year treasury yields The US 10-year treasury yields The US 30-year treasury yields How much do bond prices drop according to their durations Assuming the US 5-, 10-, and 30-year treasury yields are all 4%, the followings are how much their prices decrease when yields increase by 0.5%, 1%, 2%, and 3% respectively. And assume they pay coupons every 6 months with coupon rates of 4.13%, 3.38%, and 3.63 % respectively. Yield rises 0.5% The US 5-year treasury price drops 2.21%。 The US 10-year treasury price drops -4.02%。 The US 30-year treasury price drops -8.35%。 Yield rises 1% The US 5-year treasury price drops -4.37%。 The US 10-year treasury price drops -7.96%。 The US 30-year treasury price drops -15.75%。 Yield rises 2% The US 5-year treasury price drops...

The US 10-year treasury yield stood on the 4% level which is at about the 2007-2008 level. Then, the US 10-year bonds seem to be good investments.  Opportunity The opportunity of gain is obvious when the 10-year treasury yield maintains at or drops from the current level, since it either means locks in a 4% yield which mentally seems lucrative, or means gains in price increase. Risks But in this article, I am not worried about the earning potential. I worry more about the risks of investing in treasuries. Analysis based on historical data The first thing I'd want to do is to look at the historical returns of some treasury bond ETFs. I will be using IEF, iShares 7-10 Year Treasury Bond ETF. 2020/4 - 2023/8, the 10-year treasury yield increased from 0.65% to  4.04%. IEF's return was -15.801% with a yield increase of about 4%. 2016/4 - 2018/7, the 10-year treasury yield rose from 1.47% to  3.06%. IEF's return was  -3.222% with a yield increase of about 1....