Treasury Funds

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Brad Barrett extensively discusses Treasury funds and their role within diversified portfolios on the podcast. Here are some key insights:

  1. Diversifying with Treasury Bonds: Barrett emphasizes that Treasury bonds play a critical role in diversification. They are less correlated with the stock market, particularly during market downturns. For instance, while stocks plummeted in 2020, long-term Treasury bonds saw significant gains, thus providing balance within a portfolio 1.

  2. Types and Purchase Methods: Treasury bonds can be purchased through government platforms or more commonly via ETFs such as TLT (iShares 20+ Year Treasury Bond ETF) and EDV (Vanguard Extended Duration Treasury ETF). These funds are highly liquid and provide exposure to long-term Treasuries. Even though they offer low interest rates, their potential for capital appreciation during economic downturns makes them valuable 2.

  3. Importance of Long-Term Treasuries: Investing in long-term Treasuries like TLT and EDV can provide significant returns in volatile markets due to their sensitivity to interest rate changes. They are useful for balancing overall portfolio volatility, particularly during stock market downturns 3.

    Bond Market Insights

    Igor and Andy discuss the challenges of diversifying with bonds, emphasizing the importance of treasury bonds for true diversification. They touch on recent bond market performance and the need for a well-rounded portfolio that includes various asset classes.
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    313 | Are You as Diversified as You Think You Are?
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  4. Using Treasuries for Diversification: Barrett mentions using Treasuries as part of a strategy to mitigate risks. He suggests including various bond funds with different durations and characteristics, such as short-term bonds (e.g., SHY - iShares 1-3 Year Treasury Bond ETF) and inflation-protected securities, to diversify effectively 4.

These discussions underscore the value of Treasury funds in achieving a well-rounded and resilient investment portfolio.

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