Author Topic: anybody doing only treasuries?  (Read 1876 times)

frompa

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anybody doing only treasuries?
« on: February 01, 2013, 06:22:13 AM »
Does anybody here still stick to the old YMOYL, minimize-risk-to-principal, Treasuries-only approach to their 'stache?  I'm pretty confident I know all the reasons NOT to (practically no returns, inflation eating away, etc.), but I wonder if I'm missing any of the reasons to do so.

KingCoin

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Re: anybody doing only treasuries?
« Reply #1 on: February 01, 2013, 08:03:24 AM »
As an investment approach it makes very little sense and is probably riskier long/medium term than a more balanced approach.

You'd have to have a very specific investment thesis in order to own an outsized position in treasuries. Perma-bear Gary Shilling runs through some reasons why he like treasuries in this recent Bloomberg article:
http://www.bloomberg.com/news/2013-01-30/where-to-invest-while-markets-remain-risk-on-.html

It's interesting that a bearish bonds sentiment has become the largely consensus opinion. That doesn't mean the consensus is wrong, but if you believe contrarian investing is a way to pick up undervalued assets, holding at least some treasuries might not be a bad idea, and is a good hedge to crisis.

Tyler

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Re: anybody doing only treasuries?
« Reply #2 on: February 01, 2013, 10:09:30 AM »
IMHO, it's not healthy to be 100% invested in any asset - treasuries, stocks, commodities, even cash. The YMOYL recommendation may have made sense at the moment the book was written, but markets change in unpredictable ways and diversification is a critical preparation for an unknowable future.

BTW, I own long term treasuries as a key part of my portfolio.  They're great as a counterbalance to swings in the stock market. I'll always keep a set percentage - if they fall in value it most likely means my stocks are doing great and I'll just rebalance with those profits.

John74

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Re: anybody doing only treasuries?
« Reply #3 on: February 01, 2013, 10:52:58 AM »
Investing in nominal treasury bonds didn't even seem to work that well for Joe Dominguez himself based on what I read about his lifestyle in the late 90's. Today, one can enjoy the safety of treasuries while having inflation protection (i-bonds, TIPS), which offers a more sensible all-treasury approach. But it'll cost you.