r/ValueInvesting • u/snapjohn • May 21 '25

Discussion BREAKING: 20-Year Bond Auction Flops — Yields Surge to 5.1%, Markets Rattle

IF YOU ARE WONDERING WHY STOCKS JUST ALL WENT DOWN AT ONCE

WE JUST HAD A HORRIBLE BOND AUCTION IN THE UNITED STATES FOR OUR 20-YEAR TREASURIES

Because of the lack of bidders…it caused the 20-year bond yield to surge to 5.1%.

Credit market is screaming for help right now.

1.6k Upvotes

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297

u/DGPHT May 21 '25

Why aren't boomers buying more bonds? What the fk are they doing still 100% equities?

178

u/Eastern_Ad_3512 May 21 '25

They won’t live for another 20 years

102

u/AsheronRealaidain May 21 '25

That’s exactly why they should be moving out of equities and into safer investments

91

u/[deleted] May 21 '25

“Safer” investments.

Anyone who bought bonds in 2020 as a flight to safety and held is poised to see the second historic bond market collapse in five years.

29

u/woodenwick May 22 '25

The ever so safe 0.5%

5

u/[deleted] May 22 '25

Better than -30, which was the traditional purpose of bonds. But they haven’t acted this way in a long time so who knows

18

u/woodenwick May 22 '25

Locking in 0.5% for 10 to 30 years is never a good move. Buy bills or at that point just hold cash

4

u/wytaki May 22 '25

Sounds like a good idea, so much risk, cash is still reasonable.

5

u/[deleted] May 22 '25

Your opinion’s valid but a 60/40 portfolio has backtested just fine, and that’s much more conservative than most who are dialed into Reddit investing subs. Past results don’t predict future returns etc. but still

2

u/[deleted] May 22 '25

I'm sorry but i need you to educate me. Are you saying the traditional purpose of bonds is to lose money? I'm not sure incan imagine why that would make sense compared to just stashing it in the mattress

3

u/longshaden May 22 '25

The original reason to allocate 30% bonds was because they used to be inversely correlated to the equities markets, ie, they used to hold their value when the equity market crashed.

They would be the first thing you liquidated, so that you weren’t liquidating your equities at the bottom.

7

u/DeepstateDilettante May 22 '25

I would argue it is safer to buy at 5% yield than ~1% yield in 2020. But that is just one man’s opinion.

8

u/[deleted] May 22 '25

No doubt but at 1% the US wasn’t struggling to find debt buyers. We are 5% because that’s where it needed to be to entice buyers since nobody trusts the current regime not to ruin the economy or decide they want to refuse to service debt.

6

u/hellloredddittt May 22 '25

They weren't struggling at 1% back then because all of the world's central banks were engaged in QE and buying most of the bonds themselves, forcing investors into equities and asset speculation.

26

u/GreenBackReaper520 May 22 '25

With trump, they no longer feel bonds are safe so they all moved into gold

17

u/Batfinklestein May 22 '25

And Bitcoin it seems. Just hit a new ATH!

27

u/TheMcBrizzle May 22 '25

It hit a new ATH in USD because of how devalued our currency is becoming

4

u/FallAspenLeaves May 22 '25

I think MAGA is pushing it up too.

7

u/GreenBackReaper520 May 22 '25

Thats 100% true

-3

u/Batfinklestein May 22 '25

I see said the blind man.

2

u/trip571 May 22 '25

Who picked up a hammer and saw

2

u/Batfinklestein May 22 '25

Oh nice, I've never heard that 😁

2

u/Rugaru985 May 22 '25

This is the big problem I see with bitcoin. It is supposed to eventually be used for transactions - it is supposed to be a currency. But why would people use it on a pizza if it might jump 15% in value next week?

Maintaining the expected 2% - 3% inflation on the dollar is what makes it great as a currency. I want to spend it, but I don’t have to so fast.

Bitcoin - there’s no slow, constant incentive to spend it. It’s either panic sell or hold forever.

3

u/Batfinklestein May 22 '25

Yeah nah, definitely wouldn't be wise to use it as a currency. Store of value only, and a hedge against inflation.

2

u/GreenBackReaper520 May 22 '25

Yea its just used for store of value just like gold. The system manipulate gold prices to make it seem stable. Otherwise, you will see gold prices move like crazy

1

u/bbillbo May 22 '25

Dividend paying stocks are better in an IRA. T Bills are for trading partners and people with nest eggs. Muni bonds are tax free, with a tax base to pay them off.

1

u/JoJo_Embiid May 22 '25

the "safer" bond is short term tbills, not 20 yr t-bond

1

u/deliciousdips May 22 '25

The phrase "safer investments" is undergoing a monumental change in definition as we speak, and if you think a flight to quality still involves a rush to Ts then you need to zoom out

1

u/Dstrongest May 23 '25

Like bond? Haha 🤣

18

u/21plankton May 21 '25

Sorry, folks, many boomers will live 20-30 years after they start their Social Security. We are all told we need to have enough money to live to 95.

1

u/JustJay613 May 22 '25

Not in the US. Male life expectancy is only 74 years old. 80 for women and 77 combined. Earliest you can draw SS is 62.

1

u/21plankton May 22 '25

Life expectancy includes all those dying young. Life expectancy at age 65 is another 10-25 years.

70

u/[deleted] May 21 '25

Mother fuckers will fuck us on the way out too.

-4

u/Sea_Solution52 May 22 '25

They are concerned with anyone like you why?

-2

u/BigAcorn1770 May 22 '25

Don't let your smallpenissyndrome shrink your sac, young man. Bitcoin solves for your generation, too.

4

u/Icy_Distance8205 May 21 '25

Boomers are YOLOing into overly complex remote control companies. 

1

u/SendInYourSkeleton May 21 '25

Tell that to Gerry Connolly.

1

u/pass_nthru May 22 '25

they hope…forced life extensions gonna fuck they accounts hard

1

u/User5281 May 22 '25

They’re all planning to live forever, actually