Personal Finance & Money Asked by Straighter on March 31, 2021
I am currently reading Bogle’s common sense investing. In one chapter he states that the initial yield of a 10 year U.S. Treasury Note has a high correlation with the subsequent 10 year return.
That makes sense of course.
In the corresponding graph one can see two lines. One for the initial yield of the 10 year U.S. Treasury bond and one for the corresponding 10 year return in percent.
There are different occurrences when the subsequent 10 year return is higher than the initial yield. How can this be?
Per my understanding the subsequent 10 year return for a 10 year note means holding it to maturity. Doesn’t that also mean the subsequent return must be the same as the initial yield?
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