/biz/ - Business & Finance

So it's really late and I could have completely fucked this up, but looking at the graph and double checking my code several times I don't think I have. The rate of return for the years put into bonds is completely normal as far as I can tell. Right now I'm working off the assumption that you'd be able to sell these bonds (ten year treasuries) for about face value before their maturity. This isn't always true, but for the sake of easy analysis I'm hoping that the price changes would average out. (In most of the circumstances it'd be an extra profit since usually interest rates fall after an inversion because of stimulative monetary policy in a recession)

This graph is what happens when you invest in 10 year treasuries for 3 years after every yield curve inversion while reinvesting your dividends and interest versus simply investing in the market and reinvesting the dividends or investing in 10 year treasuries and reinvesting the interest. This includes false positives, and the great recession, but I'll show you one without the great depression in a moment.