Macro Tsimmis

intelligently hedged investment

SELL iShares Investment Grade Corporate Bonds ETF (LQD)

Posted by intelledgement on Mon, 20 Dec 10

We were hoping to hold onto this long play on bonds for longer, but the deal between President Obama and the GOP Congressional leadership on taxes that was consummated over the weekend—significant cuts in revenue with no accompanying cuts in spending—has tipped the balance in favor of inflation and higher interest rates. Consequently, the value of bonds is falling faster than the payout from the interest rate we are being paid on our investment is filling our coffers, and we need to hit the eject button here now.

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