Kash Pashootan
iShares 1-3 yr Tr. Bond E.T.F.
SHY-Q
TOP PICK
Dec 13, 2018
He wants liquidity to be able to take advantage of continued volatility going into 2019. This pays about 2% yield. Think of it as cash. It is an option to step in and do some buying later.
1-3 year bonds. Bond prices tend to go higher from Mid-May until end of Sept. The economy tends to be stable and interest rates tend to go lower during the summer.
Not recommending doing this today because there is still some momentum in the market. But he is guessing you will want to do this before May 5. This is US treasury bonds and the seasonality for them is from May 6 to October 3. This is when US bond prices go higher.
This is a little bit of a chicken play. He does take on cash as well as fixed income. Fixed income has just started its seasonal period. The real sweet spot for fixed income comes up in August, but it can make some returns here. Really a hiding place at this time.
BIL is a money-market-oriented ETF. For 2-3 years, look at SHV and SHY, to get interest rate exposure. He doesn't expect the Fed to cut rates for at least 1.5 years.
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