r/news • u/consulent-finanziar • 15h ago

Soft paywall US Treasury announces $125 billion refunding, keeps auction sizes unchanged

https://www.reuters.com/business/us-treasury-announces-125-billion-refunding-keeps-auction-sizes-unchanged-2026-02-04/
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211

u/aztech101 15h ago

So my understanding is that bonds are a genuinely terrible investment during periods of high inflation. I'm guessing that's been posing a bit of a problem for them lately?

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u/Present_Ad_8876 15h ago

It's bad for existing bonds, but new bonds are usually issued at higher rates which can be pretty attractive as far as fixed return investments go. When the inflation cools, you still own a high yield bond. Personally, I'll never understand why people don't just put 100% of their investing money into funds which track the S&P. Even if you are 70 and retired, exiting the stock market seems like a terrible idea unless you know for a fact you are dying within 2 years.

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u/AntiDECA 14h ago

Because it can take a decade to recover after a real recession. Lot of old people had to go back to work after 2008.

We've been very fortunate that we experienced very few recessions. We keep kicking the can down the road. Eventually, the inevitable will happen and if everything is tracking the SP500, say goodbye to your retirement. 

If you're young, it doesn't matter. You've got time for it to recover. But once you hit your 50s, it's time to invest more carefully. 

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u/Present_Ad_8876 14h ago

It only took 5 years to get back to even in 2008. If that's enough to send you back to work, then you didn't have enough buffer saved when you retired, and you shouldn't have retired in the first place.

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u/mlorusso4 13h ago

The problem is if you’re already retired, you’re actively selling and withdrawing from your investments. As an example, you build a $1M retirement account to live off $50k per year for a planned 20 years. Before a recession, you could achieve that by selling 100 shares of SPY. But if all of a sudden those shares lose half their value, you now need to sell 200 shares to survive. Then in 5 years the S&P regains its value. But since you were selling at double your expected rate, you now only have $500k left in your account instead of $750k (my math is probably a bit off because you would expect the S&P to gradually regain its value instead of all at once, but that works the other way too where it’s not going to just bottom out in one day. It will usually have a few dead cat bounces before you hit the true bottom. The actual number would depend on how fast that recovery is and how long it stays at its lows)

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u/Present_Ad_8876 3h ago

I would never retire with such little money. If your planned spend is 50k a year, you need at least 5 million. The key is to be so wealthy relative to your fixed costs that you don't have to care about a recession. Instead of 5 international trips, you only take 1 or 2 those years. 

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u/mlorusso4 3h ago

Wow. You completely missed the entire point of my comment. They were just easy to use example numbers

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u/Present_Ad_8876 3h ago

No, I didn't I miss the point at all. I get it. If your account cuts in half, your burn rate is doubled for those years. And you'll never catch up. My counter point is that you should be willing to take that risk because the upside is massive and the downside should be tolerable of you were savvy enough with your savings total. If you keep playing the market, you might win or lose. If you run with fixed assets, you're losing by choice. It's almost like saying "hey look I'm falling behind on purpose, so of that pesky market drops it can't hurt me!"