|
|
Post by mozart522 on Aug 10, 2022 16:23:38 GMT
Too early to tell. Employment reports and another inflation report are to come before FED meeting. A couple good hurricanes could change things a lot.
|
|
|
|
Post by FD1000 on Aug 10, 2022 16:24:19 GMT
retiredat48 previously posted, "I have a side bet fed will NOT go 75 basis points rise in Sept. Takers?" ____________________________________________________________________________________________________________ fishingrod replied: You will be betting against the market. It is at 72.5% right now predicted chance of .75BPS in Sept. R48: Not many takers on that 75 bp rise bet. However, now we see the odds at less than 50%!!
Guess fishingrod has "gone fishing."  Go VGSH... R48 +1 After this morning CPI, it reversed to 62.5% for 0.5% rise ( link). Next, tomorrow is PPI. |
|
|
|
Post by FD1000 on Aug 23, 2022 13:09:31 GMT
The no-brainer options are getting better: On a yearly basis, 3 months treasury at 2.94%...6-9 months over 3%...and no state tax FZDXX(Fidelity MM min $100K) 2.2% The bird in the hand...or... Attachments:
|
|
|
|
Post by FD1000 on Aug 30, 2022 19:37:52 GMT
The OP is from March 23. VGSH chart shows that: 1) anybody who bought from that date to the end of May(about 9 weeks) lost about 0.5-1% 2) If you bought twice, the second time in a great time in mid-June. You are now about even. So, in about 5 months, you made very little (or maybe lost). 3) In one of the posts in the middle, someone said, there is a chance to make 3% in 6 months. We have only one month to go. The no-brainer options are getting better: On a yearly basis, 3 months treasury at 3%...6-9 months about 3.3%...and no state tax FZDXX(Fidelity MM min $100K) 2.2%. Attachments:
|
|
|
|
Post by FD1000 on Sept 1, 2022 3:46:41 GMT
From the OP on 03-23-2022: Gundlach had a graph showing historically, the fed funds rate and the 2 year Treasury followed very closely. Since the fed plans to increase rates 6 more times, and assuming one is 50 basis points, then the fed funds rate gets to 2% this year. Expect a two year treasury to be slightly higher rate.FD: Gundlach, the king (without cloths) of bonds, predicted in 2016 that the 10 year treasury to be 6% by 2021, see ( article) and again in 2018( link). In 11-05-2021 it's under 1.5%. I stopped listening to him for years. 2 year treasury broke today 3.5%, and then it came down.
Attachments:
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 1, 2022 4:35:02 GMT
Actually if you remove 2 anomalous years of covid off, then Gundlach prediction still looks possible to me. No one could have predicted covid and what happened during it.
|
|
|
|
Post by FD1000 on Sept 1, 2022 12:50:19 GMT
Actually if you remove 2 anomalous years of covid off, then Gundlach prediction still looks possible to me. No one could have predicted covid and what happened during it. If there was no covid, and the economy was "normal" why would the 10 year rate go to 6%? It doesn't make sense. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 1, 2022 13:12:03 GMT
I don't think anyone believes that any prediction from 2016 is stuck in time. Things happen, predictions adjust. It is a best analysis at that time. All fail by the standard of perfect future knowledge so it is illogical to think otherwise. Look at the analyses - reasoning, rather than a number. If the assumptions and reasoning are ludicrous at the time then condemn. If there was no acknowledgement of being wrong and why, then condemn. Otherwise take what one will from someone with a reputation of merit.
As far as the 10 year rate and where it should be, I can't imagine anyone thought the low interest rate environment of the FED would go on this long. OTW, we all would have been full in on risk growth assets with long durations for the last 13 years.
Edit - Fellow posters - what is the thought now about buying 2 years as a place to park cash?
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 1, 2022 22:04:49 GMT
|
|
|
|
Post by FD1000 on Sept 1, 2022 23:12:37 GMT
I don't think anyone believes that any prediction from 2016 is stuck in time. Things happen, predictions adjust. It is a best analysis at that time. All fail by the standard of perfect future knowledge so it is illogical to think otherwise. Look at the analyses - reasoning, rather than a number. If the assumptions and reasoning are ludicrous at the time then condemn. If there was no acknowledgement of being wrong and why, then condemn. Otherwise take what one will from someone with a reputation of merit. As far as the 10 year rate and where it should be, I can't imagine anyone thought the low interest rate environment of the FED would go on this long. OTW, we all would have been full in on risk growth assets with long durations for the last 13 years. Edit - Fellow posters - what is the thought now about buying 2 years as a place to park cash? Gunslach repeated his rediculous prediction in 2016 and 2018 while everyone else was so far below the 6%. In the OP(05/2022) he made another stupid prediction when everyone knew about the high inflation and the Fed. Over the last several years I took notes about his ideas where to invest in bond categories and again, hit or miss 50/50, while the charts were so clear. This is why he lost his credibility. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 2, 2022 10:59:23 GMT
Help me out here - was buying a 2 year instead of holding cash in March stupid advice? Why? What were the other options at that time? The trend was down, but the inflation trend was up then. The idea was to start buying. Was the alternative to hold cash? I don't like holding cash and many many don't as well. Many do. I don't see either as stupid.
IF the 10 year peaked at 3.5%, is it time to buy bonds, 2 year or OTW, or start accumulating?
|
|
|
|
Post by FD1000 on Sept 2, 2022 11:34:20 GMT
Help me out here - was buying a 2 year instead of holding cash in March stupid advice? Why? What were the other options at that time? The trend was down, but the inflation trend was up then. The idea was to start buying. Was the alternative to hold cash? I don't like holding cash and many many don't as well. Many do. I don't see either as stupid. IF the 10 year peaked at 3.5%, is it time to buy bonds, 2 year or OTW, or start accumulating? Yes, it was stupid, because you lost money. We have been discussing VGSH, a bond fund. MM made money. Inflation has been raging, the Fed scream from every roof they will raise rates. The downtrend is down. Why would you buy any bond fund? ....and Gundlach predicted the fed funds rate gets to 2% this year and 2 year treasury will be close...the 2 year treasury is already at 3.5%. This reminds me of a joke. You drive in the night and you see 2 lights coming toward you, how do you know it's a truck or 2 motorcycles? You go in the middle to find out. Later, in mid-June, broker CD/treasury for 6+ months started to be appealing. The bird in the hand is an easy choice. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 2, 2022 12:27:36 GMT
I disagree - money markets are losing, my G fund is losing. In 2 years (19 months from March) we will know if it was "stupid" to START buying in March. It doesn't sound "stupid" to me as an alternative to holding cash. Not a choice I would make - or money market fund for that matter - but maybe if I didn't have the G fund.
In March we didn't know "later" in June. I assume the same March buyers, are likely still accumulating.
Again for the thread -
IF the 10 year peaked at 3.5%, is it time to buy bonds, 2 year or OTW, or start accumulating?
|
|
|
|
Post by chang on Sept 2, 2022 12:45:22 GMT
I don’t understand the rush back into bonds. I’ve been all out — except for RPHIX — for well over a year. Or two … I’m not really sure anymore. All I see is rising rates and falling prices. I’m content to wait for as long as it takes. Bond yields fell steadily from 1985 to 2020. If they rise for the next 35 years, I will be happy to wait until 2055. Meanwhile, I keep 25% of my money in RPHIX and the rest in stock.
|
|
|
|
Post by Chahta on Sept 2, 2022 13:11:47 GMT
Stupid is too strong of a word to apply to your "friends" here. Cash is only 1 thing. It is something that does not lose principal value. Dollars or CDs or Treasuries. They may lose to inflation but not principal. I took this: "I have a goodly amount of money in cash/short term investments, awaiting deployment. Patience is the code word for this money." to mean I want someplace to invest this. Not I want a place to store my spending cash. chang , I see falling prices everywhere I look for B&Hers. You are an optimistic dude looking forward to 2055, a year I shall not see. |
|
|
|
Post by FD1000 on Sept 2, 2022 13:20:52 GMT
I disagree - money markets are losing, my G fund is losing. In 2 years (19 months from March) we will know if it was "stupid" to START buying in March. It doesn't sound "stupid" to me as an alternative to holding cash. Not a choice I would make - or money market fund for that matter - but maybe if I didn't have the G fund. In March we didn't know "later" in June. I assume the same March buyers, are likely still accumulating. Again for the thread - IF the 10 year peaked at 3.5%, is it time to buy bonds, 2 year or OTW, or start accumulating? You asked about a treasury bond fund? I answered Now you are asking about G fund. G fund is great if you have access to it. =========== chanta: Stupid is too strong of a word to apply to your "friends" here. FD: I didn't call anybody stupid. I was asked directly if the idea is stupid and why I used this word and explained it. We had the worst bond performance in the first 6 months in the last several decades. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 2, 2022 13:27:48 GMT
I don't think anyone believes that any prediction from 2016 is stuck in time. Things happen, predictions adjust. It is a best analysis at that time. All fail by the standard of perfect future knowledge so it is illogical to think otherwise. Look at the analyses - reasoning, rather than a number. If the assumptions and reasoning are ludicrous at the time then condemn. If there was no acknowledgement of being wrong and why, then condemn. Otherwise take what one will from someone with a reputation of merit. As far as the 10 year rate and where it should be, I can't imagine anyone thought the low interest rate environment of the FED would go on this long. OTW, we all would have been full in on risk growth assets with long durations for the last 13 years. Edit - Fellow posters - what is the thought now about buying 2 years as a place to park cash? Gunslach repeated his rediculous prediction in 2016 and 2018 while everyone else was so far below the 6%. In the OP(05/2022) he made another stupid prediction when everyone knew about the high inflation and the Fed. Over the last several years I took notes about his ideas where to invest in bond categories and again, hit or miss 50/50, while the charts were so clear. This is why he lost his credibility. No, I would not and did not use "stupid". Please see above. Not asking about the G fund. I am asking the forum - IF the 10 year peaked at 3.5%, is it time to buy bonds, 2 year or OTW, or start accumulating? Why? Because at some point I want to start accumulating in an aggregate bond fund, which was my plan in late 2020 until bonds started their downward trend. |
|
|
|
Post by mozart522 on Sept 2, 2022 13:32:03 GMT
I currently have most of my money in t-bills or various maturities. The longest will mature in Feb 23, most in Sept, Oct, Nov, and December. All will give me more than MM, and as rates rise, so will MM, but so will the 2 month and 3 month T-bills. They are 100% safe, as are MM funds. And while the price fluctuates every day, I know exactly how much I will get at maturity. You can't do that with any bond fund. So if I buy a 3 month T-bill I know I will have X dollars in 3 months. I do not know how much a MM will grow in 3 months.
Right now today I can buy a 3 month t-bill at auction with a yield of 2.9%, or a 6 month at 3.3%. Seems better than cash or bond funds.
|
|
|
|
Post by Chahta on Sept 2, 2022 13:32:21 GMT
"IF the 10 year peaked at 3.5%, is it time to buy bonds, 2 year or OTW, or start accumulating?"
3.5% may be a top or it may be a step up to a level for a small rally as we saw in the past weeks. IMHO, accumulating is not a bad thing. Your personal yield will be based on your price paid.
|
|
|
|
Post by mozart522 on Sept 2, 2022 13:46:17 GMT
"I am asking the forum - IF the 10 year peaked at 3.5%, is it time to buy bonds,"
I will start buying bond funds when the FED signals that it is done raising or actually pauses. At that point one will get the highest yield and as the FED loosens again, you will get the increased price. Until then, sure things only for me.
|
|
|
|
Post by FD1000 on Sept 2, 2022 13:51:53 GMT
The reason I don't buy 3 months treasury and use MM at 2.2% because there is a good chance I will find a better bond OEFs trade in the next 3 months. If I buy 3 months, I have to hold until early Dec. Good chance the rebound will start in mid-Oct to early Nov and my favorite HY Muni funds will make more than VWALX. See below chart seasonality. As usual, no guarantee. If someone is thinking MM or treasury? I would definitely buy treasury, it will make more money + no state tax(in taxable). Attachments:
|
|
|
|
Post by FD1000 on Sept 13, 2022 13:17:45 GMT
As time passes, about 6 months now, VGSH keeps losing and treasuries offer higher yield. Since the OP, VGSH lost about 1%. Even if you bought at the perfect time, you made very little. Today VGSH will be down...again. The bird in the hand, treasuries, looks better now than a week ago. Attachments:
|
|
|
|
Post by Chahta on Sept 13, 2022 13:46:01 GMT
More bond pain. Why would VGSH be any different than the others?
|
|
|
|
Post by chang on Sept 13, 2022 15:50:25 GMT
More bond pain. Why would VGSH be any different than the others? I just don't understand getting back into bonds. I'm sure there's something I'm not seeing. However, anyone who thought/thinks that there won't be bouts of pain to come is foolhardy. |
|
|
|
Post by Chahta on Sept 13, 2022 16:37:34 GMT
More bond pain. Why would VGSH be any different than the others? I just don't understand getting back into bonds. I'm sure there's something I'm not seeing. However, anyone who thought/thinks that there won't be bouts of pain to come is foolhardy. Honestly I think that applies to equities as well. I still have healthy profits in equities and I am quarreling with my urge to sell some and make 2% in MM funds. The other view is to buy cheap and build yield producing positions. That can apply to bonds and equities. It will pay off in the next year or so providing rates decrease and we recover from a recession. |
|
|
|
Post by mozart522 on Sept 13, 2022 16:59:29 GMT
More bond pain. Why would VGSH be any different than the others? I just don't understand getting back into bonds. I'm sure there's something I'm not seeing. However, anyone who thought/thinks that there won't be bouts of pain to come is foolhardy. No pain in buying a 2 month T-Bill at 2.8%. When it matures on November 16, you buy another, likely at 3+% or go out a ways and get 3.5%. Risk free. Likely always will be higher than MM. Safest game in town right now. |
|
|
|
Post by FD1000 on Sept 13, 2022 17:29:09 GMT
I just don't understand getting back into bonds. I'm sure there's something I'm not seeing. However, anyone who thought/thinks that there won't be bouts of pain to come is foolhardy. No pain in buying a 2 month T-Blii at 2.8%. When it matures on November 16, you buy another, likely at 3+% or go out a ways and get 3.5%. Risk free. Likely always will be higher than MM. Safest game in town right now. +1 Maybe the only game in town. |
|
|
|
Post by oceanpatter on Sept 13, 2022 18:03:38 GMT
Dumb question: on T-bills, do you focus strictly on yield to maturity (YTD), or consider the discount vs coupon? What is the tax impact, if any?
|
|
|
|
Post by bizman on Sept 13, 2022 18:50:35 GMT
Dumb question: on T-bills, do you focus strictly on yield to maturity (YTD), or consider the discount vs coupon? What is the tax impact, if any? I have bought a little bit of individual Treasuries for my very conservative dad recently in the 2 and 3 year maturity area, since he isn't interested in going much beyond 30% stocks. I focus on YTM, coupon, and prefer a slight discount, if available. While my preference for a discount may not be purely rational, I rebel against getting back less than I paid at maturity, at least in nominal terms. There is a tax issue with Market Discount Bonds for anything over 1 year in maturity (so not for T Bills). I believe there is a de minimus safe harbor where if you buy a bond at a 25 basis point discount to par per year til maturity or less you are okay. But if you buy a 3 year Treasury at 99% of par, you are over the 75 bp amount for the de minimus safe harbor, so part of the discount must be treated as ordinary income instead of capital gain upon sale or maturity. I believe you have a choice whether to, in a sense, "amortize" this amount over the life of the bond or to just account for it at sale or maturity. I choose the latter. As always, check with an accountant to verify any and all of this. Not that this is a huge issue, but just one more thing to be aware of. Edited to add: Reminded by fishingrod ,'s post below, you can avoid much or all of my baloney above by simply buying Treasuries through Treasury Direct at auction. Then you may have de minimus OID, but not market discounts or premiums to mess with. |
|
|
|
Post by fishingrod on Sept 13, 2022 18:56:59 GMT
|
|
