Most people are watching for a breakout, figuring the market has to pick a direction, but I still lean toward a move lower first. I’d rather treat this latest rise in Treasury yields as a signal to dollar-cost average in than a signal to run for the exits. The reason is simple: when yields grind higher, the market is repricing risk. Supply pressure from the fiscal side, combined with a faster pace of Treasury issuance, makes it hard for the term premium to settle down. The short end is driven by the policy path, while the long end depends on confidence in growth and inflation—neither is a smooth ride. For example, if the 10-year yield rises from around 4% to around 4.5%, that’s only 50 basis points, but it can still cause a sizable price decline for long-duration assets. Using a duration of a little over eight years as a rough estimate, the price could fall around 4%. At the same time, though, coupon income and future reinvestment yields get higher. For someone dollar-cost averaging, that’s no reason to sell everything; it’s a chance to get more duration exposure for the same amount of money.

Weekend trading volume is only about 30% of what it is on weekdays, so even a little volume can push prices up. In these thinly traded periods, price signals can be misleading, so I generally stay put. My approach is to dollar-cost average weekly: invest a fixed amount each week, say 1,000 yuan. The higher the yield, the more units or duration exposure the same amount buys. You get less duration exposure at 4% than at 4.5%. The logic is that simple. It doesn’t predict the bottom; it just turns volatility into a cost advantage. For example, during the period in 2023 when long-term rates surged, the 10-year Treasury yield climbed from around 3.8% to nearly 5%. People chasing the market and panic-selling had a rough time—one moment they feared missing out, the next they feared a pullback. Those who stuck to a weekly schedule at least spread out their cost basis. Of course, this isn’t a guarantee of returns; it’s just discipline.

As for when the market will really turn, I don’t have an answer either. The short end depends on when policy starts to ease, while the long end depends on when fiscal supply pressures and uncertainty ease. A shift in either could send the curve down a different path. In any case, my plan is to keep dollar-cost averaging until the market tells me otherwise: if yields keep rising, I’ll keep buying weekly; if they really turn, I’ll adjust based on my position and duration exposure. So what’s the conclusion? I still haven’t figured it out.