Patience

One aspect of investing that is crucial is patience. I think it is sort implied in some of the things covered here but I am not sure I have specifically written about being patient.

The best way to address this might be an example. For several years bond yields have been very low compared to historical norms.

In addition to low yields the market has not rewarded for going out further in time. With yields on the low side it makes little sense to take a yield for ten years when the same yield can be had for two years.

As this has been the case I have been writing about favoring short dated paper and as a function of spreads being narrow, not taking too much bond market risk.

At some point the curve will normalize, spreads will widen and I will have a different looking fixed income portion of the portfolio than I do now.

More specifically in the last couple of years there have been a couple of times where there have been spikes up in some yields. This was the case two years ago and I bought two year treasuries for a lot of people. Those just came due but now two year yields are very low (keep in mind I do not want to go further out) so the best thing to do is just wait.

Yields are low so prices are high. Buying high is usually not the best trade. Obviously I have exposure to some other fixed income products but for some parts of the market I am waiting, patiently.