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30 years treasury bonds

date: 2023-04-06

30 years treasury bonds is a very useful investment tool. but it's counterintuitive because of usually bonds return rate is low at 3%-5%, but long term bonds not, cause of the face value, coupon rate, bond price math magic, the yield decrease 1%, and the bond price will increase near 30%.

The calulation is simple, here is a example case:

this is the power of long term bonds math, if we expect interest rate will decrease 1%, we will get 30% return of our invest.

who buy bonds

Because of safety and security of US treasury bonds, there is widly investors buy it, roughly proportion is:

how they buy bonds

basic principle:

so all origin driving force is demands of market. what will influce market demands?

what will influence bonds demands?

generally:

but, need to be metioned, market is complicated, not single dimensional, you should carefully consider the relations, likes when Ukriane-russian war started, yields not goes down but goes up, because its is in high inflation time, and the war make infation more worst.

what will long-term bonds directly impact

bonds demands supply cruve