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cover of episode More Ways to Lock in Higher Yields in Case Interest Rates Fall

More Ways to Lock in Higher Yields in Case Interest Rates Fall

2024/1/31
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Money For the Rest of Us

AI Chapters Transcript
Chapters
This chapter explores the reasons behind locking in higher yields despite the possibility of falling interest rates. It examines the unpredictability of interest rate movements and the potential negative impact of volatility on longer-term bond investments, illustrating the risks associated with relying solely on market predictions.
  • Unpredictability of interest rate movements
  • Risk of volatility drag on long-term bonds
  • TLT's performance as an example of volatility drag

Shownotes Transcript

Professional investors and other market participants are lousy at forecasting interest rates. Here are three more options to lock in higher yields today.

Topics covered include:

  • The risk of buying long-term bonds and ETFs to benefit from falling yields
  • How volatility drag has impacted a long-term bond ETF like TLT
  • Why interest rates won't go up just because the government issues more bonds
  • How CDs, fixed annuities, and zero-coupon bonds work
  • We compare and contrast the seven fixed-income options reviewed in this two-part series

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Show Notes

Investors may be getting the Federal Reserve wrong, again—The Economist)

Today's Best Multi-Year Guaranteed Annuities—Immediate Annuities)

Zero-Coupon Treasuries Flew Off Shelves During October Yield Surge by Elizabeth Stanton—Bloomberg)

Investments Mentioned

iShares 20+ Year Treasury Bond ETF (TLT)

Invesco BulletShares 2029 Corporate Bond ETF (BSCT)

Related Episodes

463: How to Lock in Higher Yields in Case Interest Rates Fall)

418: Bond Investing Masterclass)

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