Show notes
Today we're talking bonds, Treasury Bonds, that is. 🍸 Along with yields, impacts on the market, and how the US always pays its debts 🦁😏
🤨 What exactly is the yield curve and what does an inverted yield curve mean?
We're going to learn how to use this as a scrying tool to predict the future in terms of interest rate changes and economic activity. Let's demystify the fixed-income security market (did you know there is not just a stock market, but also a bond market?) and learn about the US department of the treasury and how they issue debt.
🔮Yield Curve Crystal Ball 🔮
Normal Yield Curve = great, economy expected to grow over time
Steepening Yield Curve = might mean inflation is high, short-run good for stocks, but see what the Fed does
Inverted Yield Curve = Not always, but can indicate a recession
*See GDP and Economic Data for the scrying results*
💰 Should We Buy US Treasury Bonds, Notes or Bills Now?
FYI: Bonds = Long-term; Notes = Medium amount of time; Bills = Short-term
Having a portion of your portfolio that is risk-free (i.e. bonds) helps to have you a more diversified portfolio.
As of Nov. 9, 2023:
- 2-Yr T-Note Yield: 5.037% (this is prettttty good for a short-term if you wanted to look into these - not advice, we are not financial advisors as a disclaimer)
- 5-Yr T-Note Yield: 4.654%
- 10-Yr T-Note Yield: 4.640%
- 30-Yr T-Bond Yield: 4.782%
💸 How do you buy US Treasurys?
Go to your screener tool (we taught you about screeners in Ep. 08) and select "category: fixed income or treasurys" and you buy them in an ETF.
🧠 FYI, treasurys is the plural when we're talking about US treasury securities to differentiate from "treasuries" as in an institution like the Treasury Department 🧠
🧐 Who is "The Treasury" and What Do They Do?
They are the finance department of the US government. They issue the debt.
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Market MakeHer is an investing education podcast taught teacher-learner style by a 15-year finance expert, Jessica Inskip, to her very inquisitive beginner investor friend, Jessie DeNuit. We want to help you get better with your “finance-sis” (get it? No finance bros here). Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We believe that investing is for everyone and that's why we break down complex investing topics - from "Her" perspective. You’ll also learn about free tools and resources on our podcast and we offer a ton of free educational content on our website so you can become fin-fluent.
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