Seasonality of bond prices

As I wrote in a previous post, bond yields have a reliable seasonality.

I discovered this pattern when I was managing --many years ago -- $4 billion of interest rates derivatives.

I noticed then that yields tend to decline (and bond prices to rise) during the summer months.

Yields, instead, rise (and bond prices decline) more often than not during the winter months.

This summer yields behaved exactly as predicted by the seasonality pattern. The graph of TLT shows quite clearly this pattern (click on the graph to enlarge it).

Of course, the bond seasonality and the stock seasonality offer an interesting portfolio strategy.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977