"Synthetic Bonds"

Before we talk about "synthetic" bonds, let's look at what "real" bonds yield today.

                                                                   U. S. Treasury Yields

Now let's try a different way of thinking about "yield" or "investment return".

Instead of thinking of an "annual" yield or return of, say, 10%:

...think of .83% achieved in a month ( x 12) as a 10% "annualized" return...

...or .38% achieved in 2 weeks (X 26) as a 10% "annualized" return...

...or .19% achieved in 1 week (x 52) as a 10% "annualized" return.

This is not unlike a Treasury Bill, for example. When you buy a short term T-bill maturing in, say, 10 days, you are quoted an annualized yield.

Now consider this...

Artificial intelligence (AI) firm ChatGPT recently calculated that there is ONLY A 25% CHANCE that the S&P will close up 10% at the end of the next 12 months... but  a GREATER THAN 90% CHANCE that the Index will be up .19% (10% "annualized")... if only intraday... at some point during the next week...or up .38% (10% "annualized") at some point during the next two weeks.

Synthetic Bonds are designed to quickly capture modest returns in short periods of time as "annualized" returns, which, done continually, will eventually translate into a significant "annual" return..typically around 10%...in many cases doubling today's conventional bond rates.

Bottom line: It is statistically much easier to quickly grab 10% "annualized" returns in short periods of time... rather than waiting and hoping for a 10% "annual" return 12 months from now!

                                           Details: cyberterrys@hotmail.com