Topic: Weirdness..................
With the current interest rate environment and the over-zealous buying of
long bond funds we have a very odd situation. Short term bond funds like
RAVI, SCHO and JPST are now yielding more than TLT (a 20+ year maturity
bond funds).
This pendulum is going to swing hard and fast, soon. When it does, TLT is
going to get beaten back down. It's currently 20% above where it was a year
ago. Current yield is ~2.15% vs RAVI at ~2.6%, SCHP at 2.19% and JPST at
2.39%.
So, in one case you get to risk your money for an average of 20+ years with
less yield than if you pick up a short term fund and get paid more. This
sort of imbalance usually doesn't end well for the over-priced part side.
Tom
Buy from the Scared; Sell to the Greedy.....
