Time Part 2

Investing in fixed income securities

The arrow of time makes our existence meaningful. Tomorrow becomes today, and today becomes yesterday. All actions and inactions define our timeline. The same is true for investing. The position we do not take is at least as crucial as the one we take.

Moreover, time impacts various financial instruments differently. Equity is implicitly dependent on time, while instruments like bonds and options are explicitly dependent.

As a side note, I write mainly for the LEAPS strategy, which is executed with long calls. So, I treat time, i.e., option time decay, as a risk management fee to get protection against path dependency. In that case, time works against me. I already covered velocity, time, and distance in the context of LEAPS calls.

Today, it’s time to write about bonds. Unlike long options, time is our friend when we invest in fixed-income secu…