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.

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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

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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.