Your Survival Guy

Preparing your investments and family for when disaster strikes.

Disclosure

  • Home
  • Your Survival
    • Special Report: FOOD SHORTAGE: Crazed Hoarding Is Not Preparing
    • Your Survival Guy’s Super States
      • 2023
      • 2022
      • 2021
    • Constitutional Carry
    • EMP Threat
    • Tucker Explains
    • Newport Gas Outage
    • Water
      • Emergency Water Storage
      • Let There Be Water
    • Get Your Gun and Your Training Now
    • Satellite Phones
    • Navy SEAL Survival Kit
  • Your Money
    • Coronavirus Infects Stock Market
    • Looking for a Better America
    • You Invest, They Win
    • Where to Keep Your Cash
    • Paris
    • How to Buy a Boat
    • Dead or Alive? The Future of Long-Term Investing
    • Is Vanguard too Big?
    • Cryptocosm and Life After Google
    • The Last Intelligence Report
    • The Truth Behind the S&P 500
    • RAGE Gauge
    • How Many “Retirees” Will Keep Working?
    • Your Retirement Life
    • You’ll Love This if You’re Dreaming of an Active Retirement Life
  • Weapons
    • Self Defense
    • Every Family Should Own at Least One Shotgun: Here Are Three
  • About Me
    • Your Survival Guy: “Life on Main Street Hasn’t Been This Hard in a While”
    • Preparing for Times Like These
    • My Videos/Pics
    • Music
      • RIP Neil Peart: You Will Always Be Remembered as a “Modern-Day Warrior”
    • Your Survival Guy: Make Your Bed and The Hero Code
  • You
    • Our Cabin on Kodiak, Alaska
    • If You Are in Pain, this May Help. It Helped Me.
    • How to Save for a Grandchild
    • FIRE! Financial Independence, Retire Early
    • Compound Interest
    • Arithmetic of Portfolio Losses
    • Maximum Portfolio Withdrawal Rate
    • An Efficient Frontier
    • Retirement Compounders
    • Counterbalanced Total Returns
  • Survive & Thrive
    • March 2023: How Long Have You Been in the Investment Business?
    • February 2023: 4 Life Changing Words: “You Should Try This”
    • January 2023: Stacking Wood and Compounding Money
    • December 2022: Your Survival Guy Prefers Bombardier’s Global Express 7500
    • November 2022: Arriving in Style at Le Bristol Hotel, Paris
    • October 2022: Sink Your Teeth into These Bond Yields
    • September 2022: Do You Have the 7 Habits of Highly Effective People?
    • August 2022: “Watch This Boat off Our Stern,” My Dad Said “He’s Coming in HOT”
    • July 2022: MONEY TALKS: Your Survival Guy’s Best Service in Paris
    • June 2022: “I’ve Been with Richard Young for Over 30 Years Now”
    • May 2022: Survive “If You Fail to Plan, You Plan to Fail”
    • April 2022: Dream On! Fishing the Double Down in Key West
    • March 2022: Your Survival Guy Hears the Craziest Investing Stories
    • February 2022: Your Survival Guy’s 2022 Super States
    • January 2022: The Least Affordable Housing Market in the U.S.
    • December 2021: Listen Your Survival Guy is not “Mr. Peanut”
    • November 2021: Joe Biden is Weaponizing Your 401(k) Against You
    • October 2021: Time to Get Your Lazy Cash Off the Couch
    • September 2021: What’s Your Survival Guy Investing in Right Now?
    • August 2021: To Where Will You Flee?
    • July 2021: This Bubble’s Popped Baby
    • June 2021: Your Survival Guy’s Summer Job, Inflation & You
    • May 2021: You’re Telling Me Friends Ask You This Question
    • April 2021: Is There One Best Place in America for ‘Liberty Retirees?’
    • March 2021: America’s Growth Corridors
    • February 2021: Troops in D.C. & Your Authoritarian Virtual Panopticon
    • January 2021: Are You Ready for The Great Reset?
    • December 2020: Disaster Prep in Our Newport Bunker and Your Survival
    • November 2020: Election 2020 Edition: Stock Market is Predicting a Trump Win
    • October 2020: You Invest They Win, AGAIN
    • September 2020: Proud to be an American: Pro-Trump Parade Turns Rhode Island Red
    • August 2020: The Clock is Ticking: You Must Protect Your Family
    • July 2020: What Will Her Life Be Like Now?
    • June 2020: Your Survival Guy’s Home (and Money) Protection Plan
    • May 2020: Future Look at Covid-20, or the Next Deadly Virus
    • April 2020: Only Trump Saw the Risk in America’s Relationship with China
    • March 2020: Coronavirus Infects Stock Market
    • February 2020: Escape the City: Live Small, Cheap, and Safe in America
    • January 2020: Is Your Cash Safe? Probably not This Safe
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • Welcome

“Hey, Survival Guy, Why Are Bond Prices Down?”

March 23, 2022 By E.J. Smith - Your Survival Guy

By solarseven @ Shutterstock.com

In my conversations with you, you’re asking, “Hey, Survival Guy, why are bond prices down? Aren’t they supposed to be our anchor to windward?”

If you’re looking to be a member of my Survive & Thrive club, click here.

“Of course, they are,” I say, “but bond prices decline as interest rates rise.”

“Well, don’t take this the wrong way Survival Guy, but isn’t it obvious rates are going higher?” you say.

“About as obvious as predicting Covid or the war in Ukraine,” I respond.

Look, I’m Your Survival Guy, not Your Hope and a Prayer Guy. I know how ugly stock and bond markets can get, and I don’t get too worked up about temporary declines in prices. Your Survival Guy hasn’t sold his bonds. Your Survival Guy hasn’t sold his stocks. He always keeps a balanced portfolio and personally, just invested more in the market this week.

Your key in times like these is to understand why you do what you do. For me, I get a ton of peace of mind knowing that the importance of the Survival Guy Capital Structure pyramid hasn’t changed one bit. I know, I know, bonds are boring, blah, blah, blah. But you know what? When the you-know-what really hits the fan, bondholders get paid well before common shareholders. I like that. And if you’re in or near retirement, getting a return of principal matters a whole lot more than your return on it.

Don’t hate Your Survival Guy for this low interest rate environment and inflated assets. This is a formula for DISASTER constructed by economists at the Federal Reserve—a political beast if I’ve ever seen one. With that in mind, understand that bond price sensitivity, or duration, is a function of maturity and interest rates. The longer the maturity, the more sensitive prices are to interest rates (up and down).

Take a look at this table from the Federal Reserve below. Your Survival Guy sees the sweet spot around 3-years. That’s where I do my business today, and I’d suggest the same for you. Sure, there are values further out on the curve that are ripe for the picking. In the meantime, don’t be pushed out of your bonds. No one said this was going to be easy.

Instruments 2022 2022 2022 2022 2022
Mar Mar Mar Mar Mar
15 16 17 18 21
Federal funds (effective)  0.08  0.08  0.33  0.33  0.33
Commercial Paper
Nonfinancial
1-month  n.a.  0.36  0.35  0.36  0.34
2-month  n.a.  n.a.  0.62  0.65  n.a.
3-month  n.a.  n.a.  n.a.  n.a.  n.a.
Financial
1-month  0.44  n.a.  0.59  0.46  0.49
2-month  n.a.  n.a.  n.a.  0.63  n.a.
3-month  0.91  0.90  1.01  0.80  0.79
Bank prime loan  3.25  3.25  3.50  3.50  3.50
Discount window primary credit  0.25  0.25  0.50  0.50  0.50
U.S. government securities
Treasury bills (secondary market)
4-week  0.21  0.23  0.20  0.19  0.21
3-month  0.46  0.43  0.40  0.41  0.55
6-month  0.84  0.84  0.79  0.80  0.93
1-year  1.19  1.26  1.20  1.19  1.28
Treasury constant maturities
Nominal
1-month  0.22  0.24  0.20  0.19  0.22
3-month  0.46  0.44  0.40  0.42  0.54
6-month  0.86  0.86  0.81  0.83  0.95
1-year  1.28  1.35  1.30  1.29  1.40
2-year  1.85  1.95  1.94  1.97  2.14
3-year  2.04  2.14  2.14  2.15  2.34
5-year  2.10  2.18  2.17  2.14  2.33
7-year  2.16  2.22  2.22  2.17  2.36
10-year  2.15  2.19  2.20  2.14  2.32
20-year  2.57  2.56  2.60  2.53  2.67
30-year  2.49  2.46  2.50  2.42  2.55
Inflation indexed
5-year  -1.32  -1.16  -1.34  -1.34  -1.19
7-year  -0.98  -0.86  -1.00  -1.00  -0.86
10-year  -0.69  -0.61  -0.71  -0.72  -0.58
20-year  -0.25  -0.22  -0.29  -0.30  -0.19
30-year  -0.03  -0.02  -0.08  -0.09  0.01
Inflation-indexed long-term average  -0.09  -0.07  -0.13  -0.14  -0.03

Action Line: I want all the success in the world for you. You know being successful isn’t easy. It requires discipline and getting up early–not the one-two punch most think about in retirement. That’s OK. That’s my job. Stick with Your Survival Guy here. And if you want to talk, you know how to reach me.

The following two tabs change content below.
  • Bio
  • Latest Posts
My Twitter profileMy Facebook profileMy Instagram profile

E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
My Twitter profileMy Facebook profileMy Instagram profile

Latest posts by E.J. Smith - Your Survival Guy (see all)

  • Are You Fairly Wealthy? I’m Listening - March 21, 2023
  • How Long Is Your Water Supply Chain? - March 21, 2023
  • Your Survival Guy’s BEST Insider’s Guide to Key West - March 20, 2023
  • Be Wary of Those Who Wrap Themselves in Capes - March 20, 2023
  • For Whom Is Your Portfolio Serving? - March 17, 2023

If you enjoyed this post, email it to a friend:

  • Email
  • Print
  • Facebook
  • LinkedIn
  • Twitter
  • WhatsApp

Related Posts

Money 101

Recent Posts

  • Are You Fairly Wealthy? I’m Listening
  • How Long Is Your Water Supply Chain?
  • Your Survival Guy’s BEST Insider’s Guide to Key West
  • Be Wary of Those Who Wrap Themselves in Capes
  • For Whom Is Your Portfolio Serving?
  • ESG: Are Markets Ready for “A Needed Dose of Reality?”
  • Was Silicon Valley Bank a Victim of ESG?
  • Are You Living Your Best Life?
  • March RAGE Gauge: Will the Black Swan Usher in Digital Dollars?
  • Gretchen Whitmer Reviving Forced Unionization in Michigan

Trending

  • Prepping for the Storm, Hiding in Cozy My Cave
  • Are You Living Your Best Life?
  • Will the Black Swan Usher in Digital Dollars?
  • “Will We Have Enough to Live On Forever?”
  • Hey, Where’s Everyone Going? Follow the Money Kid
  • Take Action: Don't Wait for the Best to Save You
  • How the Rich Get Richer: You Invest, They Win
  • March RAGE Gauge: Will the Black Swan Usher in Digital Dollars?
  • New England Is Starving for Energy
  • Is Your Good for Nothing Cash Doing Anything with Its Life?

Must Reads

  • Investment Advice: Sticking with the Four-Year-Olds
  • Hey, Where’s Everyone Going? Follow the Money Kid
  • “Talk to Me, Goose!” Time Flies in Top Gun: Maverick
  • How Will YOU Feel in Retirement? Let Me Explain
  • Your Survival Guy’s 2022 Super States: #1 New Hampshire
  • Some Lessons You Just Can’t Get from a Textbook
  • The Importance of a Balanced Portfolio
  • HELLO: “How’s It Going? I Don’t Know Anything”
  • GAME ON! Lessons from Street Hockey on Baker Lane
  • Don’t Let Your Lazy Cash Eat all Your Food
Only if You’re Serious
Crazed Hoarding Is not Preparing
How to Save Rainwater Effectively
Your Survival Guy in Paris
Your Survival Guy's Fishing Stories
Financial Independence, Retire Early
Money 101
Pandemic Creates Virtual Panopticon
Emergency Water Storage
Find Freedom in America
Second Amendment
How Can You Save Money for Your Grandchild
Great Reset
See Who's Missing the Boat
Richard  Young Reports
How You Can Save Money for Your Grandchild
Why Fidelity is Number One
The Best States for Survival
You Invest, They Win
Escape the City
Why Vanguard is Too Big for YOU
Island Life

Copyright © 2023 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.