Post #9901 by mungofitch on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

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With interest rates going down I noticed the SEC yield is down to 3.75%. That is the yield I use. I was thinking funds like IUSB and FBND, would be better because as interest rates go down prices go up, so I probably would not lose money buying those funds.

If/as longer dated rates fall, longer dated securities will rise in price.

The problem is that the current prices for everything along the yield curve already include the market's consensus view of the future trajectory of rates at every duration. You'll do extra well by choosing one duration over another only if your insight into the trajectory is more insightful than the current consensus...a very tough hurdle : )

Better to simply pick the duration that matches how long you think you'll want your money ticking along in fixed income.

Jim

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