Originally published September 9, 2019
In an environment with stable inflation, the yield curve should typically be inverted.
Long term investors care about money when they retire, not next month. Most investors are long-term.
If inflation is steady, long-term bonds are a safer way to save money for the long run. If you roll over short-term bonds, then you do better when interest rates rise, and do worse when interest rates fall, adding risk to your eventual wealth. The long-term bond has more mark-to-market gains and losses, but you don't care about that. You care