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Post by yogibearbull on Dec 13, 2021 3:32:32 GMT
steadyeddy, Chahta, Fearchar, rhythmmethod, instead of , say, $10,000 in PIMIX, one can have $5,865 in PDI very conveniently. This is because from holder's point of view, PDI is 1.705x leveraged (as of Dec 10; it will change slightly on Dec 13); I have explained elsewhere why what M* or CEFConnect report is not relevant to CEF holders. Think of PDI as best ideas from the SAME managers.
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Post by Chahta on Dec 13, 2021 4:21:45 GMT
$1000 min at Schwab. Just $49.95 TF. , thanks. Looks like min is $2,500 but still thanks for the info. Actually 1k in IRAs and 2.5k in other accounts. |
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Post by alvinthechipmunk on Dec 13, 2021 4:24:22 GMT
Lots of traffic on this thread. I've never owned a home. But I would accept that 1.75 interest rate and put about HALF in the market. With expected profit, the mortgage could even be paid off early, with a bunch left over. There are no guarantees, of course, but LIFE is a risk.
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Post by Fearchar on Dec 13, 2021 11:19:37 GMT
Thanks yogibearbull, Appreciate your comments regarding PDI leverage; I missed the problem you found with Morningstars Leverage calculations. However, it is the risk of PDI that is concerning. Standard deviation (again according to M*) over the last 3 years for PDI is 15.87 with Sharpe Ratio of 0.43 For PIMIX the std dev is 5.78 with Sharpe Ratio of 0.78. |
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Post by Chahta on Dec 13, 2021 13:37:21 GMT
Fearchar , I prefer to look at my bonds as a portfolio. Then the SD drops to below 4 for 10 years. This includes PTY and PIMIX. As far as risk for PDI, steelpony10 explains it the best.
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Post by Fearchar on Dec 13, 2021 16:16:44 GMT
Chahta, Yes; It is best to consider a portfolio as working together. Comprehensively. I've run many optimization scenarios and depending on the time frame there is a place for PDI. However, more often than not PIMIX dominates debt allocation within the optimization. I've also considered AGG & PFN. They all tend to take a backseat to PIMIX. So, not saying there will never be a place for PDI, but I do struggle intuitively with it.
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Post by steadyeddy on Dec 13, 2021 18:21:51 GMT
Chahta , Yes; It is best to consider a portfolio as working together. Comprehensively. I've run many optimization scenarios and depending on the time frame there is a place for PDI. However, more often than not PIMIX dominates debt allocation within the optimization. I've also considered AGG & PFN. They all tend to take a backseat to PIMIX. So, not saying there will never be a place for PDI, but I do struggle intuitively with it. I kinda feel the same away about PDI/cefs. I do not at the present time own PIMIX either - so far staying with plain vanilla bond ETFs. |
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Post by retiredat48 on Dec 14, 2021 21:09:55 GMT
to steadyeddy , PIMIX goes short (and long) both cash and bonds. That makes a lot of sense to me considering that current real interest rates are below zero for both cash and bonds. While there may be some bonds funds that also go short, I believe PIMCO has much more experience at it. Also, considering how small spreads are with high yields, I am not especially keen to take on a lot of credit risk. I realize that they have not been hitting it out of the park lately, but I'm owning them for both stability and reasonable long term returns. I'm open to considering other debt funds, but that is my thinking. It's the only Bond fund that I own. To Fearchar and others... IMO there is a leveraged mortgage-based CEF, namely PDI, a PIMCO Fund that has undergone a merger of likes, and is getting sold off to what may be very attractive prices and yields. Only, the actual yield may not be known until Jan distributions announced (any day now). You could read up on PDI ( a fav of many posters) on forums, and decide whether or not to allocate some money here. You may be looking at 8-9% yield. Premium near zero. Tax loss selling should dry up shortly before year end. R48 |
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Post by steadyeddy on Dec 15, 2021 2:33:40 GMT
to steadyeddy , PIMIX goes short (and long) both cash and bonds. That makes a lot of sense to me considering that current real interest rates are below zero for both cash and bonds. While there may be some bonds funds that also go short, I believe PIMCO has much more experience at it. Also, considering how small spreads are with high yields, I am not especially keen to take on a lot of credit risk. I realize that they have not been hitting it out of the park lately, but I'm owning them for both stability and reasonable long term returns. I'm open to considering other debt funds, but that is my thinking. It's the only Bond fund that I own. To Fearchar and others... IMO there is a leveraged mortgage-based CEF, namely PDI, a PIMCO Fund that has undergone a merger of likes, and is getting sold off to what may be very attractive prices and yields. Only, the actual yield may not be known until Jan distributions announced (any day now). You could read up on PDI ( a fav of many posters) on forums, and decide whether or not to allocate some money here. You may be looking at 8-9% yield. Premium near zero. Tax loss selling should dry up shortly before year end. R48 , when exactly would the next month's distributions post for PDI? |
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Post by Chahta on Dec 15, 2021 12:55:11 GMT
If PDI is like PTY, they declare early in a month (12/7 for Dec.) and don't pay until the 1st of the next month. Very different from a mutual fund.
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bd1
Ensign
Posts: 20
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Post by bd1 on Jan 7, 2022 11:45:32 GMT
Xray - that is exactly what i did, but it occurred in April of last year, when stocks and interest rates were both very low. I got $150,000 at 1.7% and put half in SCHA (small cap index) and half in SCHD (large cap index). I was thinking of Buffet - buy when others are fearful. I also figured it might be my one chance to make a big improvement in portfolio size. Well, it worked. I just left the shares in my account, and they are still there, but worth far more than I paid. But I accomplished my purpose and would probably not make such a risky purchase again, especially since stocks are at record highs. Still, as R48 says, having money in unencumbered real estate does not bring much tangible monetary benefit - but it does bring peace of mind for many
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Post by retiredat48 on Jan 7, 2022 16:53:22 GMT
To Fearchar and others... IMO there is a leveraged mortgage-based CEF, namely PDI, a PIMCO Fund that has undergone a merger of likes, and is getting sold off to what may be very attractive prices and yields. Only, the actual yield may not be known until Jan distributions announced (any day now). You could read up on PDI ( a fav of many posters) on forums, and decide whether or not to allocate some money here. You may be looking at 8-9% yield. Premium near zero. Tax loss selling should dry up shortly before year end. R48 , when exactly would the next month's distributions post for PDI? Sorry I missed your post. The "new" distribution for Jan was announced near year end. It was not lowered...kept the same. PDI has since zoomed up in price. A zoom as far as fixed income funds go. Glad I made additional buys in December. Tax loss selling seemed to be a role player as well. R48 |
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Post by retiredat48 on Jan 7, 2022 16:59:46 GMT
Xray - that is exactly what i did, but it occurred in April of last year, when stocks and interest rates were both very low. I got $150,000 at 1.7% and put half in SCHA (small cap index) and half in SCHD (large cap index). I was thinking of Buffet - buy when others are fearful. I also figured it might be my one chance to make a big improvement in portfolio size. Well, it worked. I just left the shares in my account, and they are still there, but worth far more than I paid. But I accomplished my purpose and would probably not make such a risky purchase again, especially since stocks are at record highs. Still, as R48 says, having money in unencumbered real estate does not bring much tangible monetary benefit - but it does bring peace of mind for many In fact, I am moving your post into my library of people successfully taking on debt, buying stock and high yield bond funds where the dividend exceeds the debt interest rate...and doing well. I'll join you in tipping a glass of wine tonight! R48 |
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