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Post by retiredat48 on Apr 15, 2022 23:33:10 GMT
chang , who posted in favor of RPHIX: "You also didn't mention the chart: www.morningstar.com/funds/xnas/rphix/performance" Well, I went and viewed comparison charts. I see it differently. Yes, RPHIX has a very smooth upward moving performance chart...for years. VGSH has a more erratic chart, and is DOWNWARD with about 3% loss in recent months. This is why I favor it. I am looking for both a yield return AND a capital gain bet. Looking at VGSH versus the ultra-smooth RPHIX historical chart shows these periods where VGSHX rebounds and moves upward, much more in total return than RPHIX. I like the fund that is down 3% recently, versus the "steady-eddie, small yielder." I also get a hedge against a recession. Generally, a recession results in a flight to safety in treasuries(upward pressure); and an exiting from junk bonds (downward pressure). Fun part is...we'll know likely next December re which fund got best total return!!. It's not a huge-bet either way. R48
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Post by bobfl on Apr 16, 2022 21:01:49 GMT
After doing this for a very long time I got out when the sell signal flashed. "High inflation; agressive rate hikes" that's my sell signal.
Then I made a spreadsheet that is automatically following 73 BBB- (and better) qualified preferreds. That's mostly what I buy (plus a few bonds). Watching those drop, preparing to get in.
(These are all preferreds that never should be redeemed because they were written too cheap.)
My problem is my ever changing goal for reentry. First I said 6% plus a 20% discount; next a 2% Fed rate hike, then year end selling.
What are you waiting for?
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Post by Chahta on Apr 18, 2022 22:49:04 GMT
novicegirl , At Gettysburg, General Lee was winning on the first day. He refused to listen to his subordinate General Longstreet, who urged him to pick up and leave, to re-deploy to a more advantageous location, between there and Washington. But Lee saw such a move as a retreat, and "his blood was up," so he would not do it. I'm retired. 67. Spent a good bit of time getting the portfolio to a classic, moderate-risk combination of 60 bonds and 40 stocks. Then came covid, then came supply-chain problems. Then came inflation. Then came uncle Poot-butt invading Ukraine. One thing after another. I have kept a close eye on my total performance in each mutual fund. TRP provides that statistic when you log-in. "Personal rate of return since inception." So, I have re-deployed, not retreated. I rescued a big bunch of profit from a couple of bond funds and used the proceeds to buy both stocks and bonds, in differently-tilted funds. I'm down quite a bit already in TRP High Yield. TUHYX. Poop. But let it drop another 5% and I just might buy MORE. My TRP Floating Rate/Bank Loan fund PRFRX is hugging the zero-line, still, since I got in. Meanwhile, monthly dividends continue, so there's THAT. The decades-long bond rally is dead. I've come from 60% bonds just a few weeks ago down to 35%. And 41% domestic stocks, with another 17% in foreign stocks. My best mover in '22 has been TRAMX. Strangely not much oil in that fund. Big slug of financials. ......What should you do? I'd say re-deploy. Sometimes you eat the bear, and sometimes the bear eats you. Don't stay married to your investments. But a YTD figure is not as meaningful as a 5 or 10-year performance number. You mentioned up to 8% losses in some of your bond funds. Ouch. I'm feeling it, too: one of mine is down YTD by 6%. Even my TRP Financial Services fund PRISX is down -4.73% YTD. I'd seen Financials recommended. Those institutions hold all the money, right? ? But so far, it's been a losing proposition. I'm holding, and bought a bit more last night. Miners and utilities don't seem like a bad way to go. Look at UTG. Or CCJ. Or that Postal REIT: PSTL. Or XLE. But depending on your risk tolerance, go after some real bargains. WOPEY. WFG. Or SMFG (Sumitomo Bank.) Stocks will do better than bonds, going forward. The ballast-effect of your bonds will only serve as an anchor, looking forward! But stay diversified. Don't bet the farm on stocks, ONLY. That's just my opinion, anyhow. Re- invest all profit. You have 17 years to go. www.morningstar.com/stocks/xnys/smfg/quotewww.morningstar.com/stocks/xnys/ccj/quotewww.morningstar.com/cefs/xase/utg/quotewww.morningstar.com/stocks/xnys/pstl/quotewww.morningstar.com/etfs/arcx/xle/quotewww.morningstar.com/stocks/pinx/wopey/quotewww.morningstar.com/stocks/xnys/wfg/quotewww.morningstar.com/funds/XNAS/PRFRX/quotewww.morningstar.com/funds/XNAS/TRAMX/quotewww.morningstar.com/stocks/xnys/ebr/quotewww.morningstar.com/stocks/xnas/hban/quoteOr stick to funds and ride it out with a balanced fund or two. TRP, Fidelity. Others. What are some of the bond funds you hold?
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Post by oceanpatter on Apr 18, 2022 23:54:41 GMT
Grateful to novicegirl for starting this thread. For comparison, I still have the following funds, which have all lost 5 - 6% ytd:
- TSIIX - PIMIX - VWINX - FMSDX - VBAIX - PRWCX
Recently sold PHYZX and IOFIX (which recovered well after the 2019 implosion). I will keep PRWCX, and probably add to it at some point. The others, I'm not so sure. My objective was a stable portfolio that throws off some income. As they say, lol. Thoughts?
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Post by richardsok on Apr 19, 2022 0:41:22 GMT
ocean -- OK, I can see with a couple of your MFs (VBAIX, FMSDX) one might have been lured into hoping for a rally around early March. But with low volatility funds like TSIIX and PIMIX, the question screams to be asked ---- WHY would someone hold onto any asset for weeks and weeks and just WATCH it leak value? It's the FIRST rule of Investing 101 --- "Cut your losses early and let your winners run."
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Post by alvinthechipmunk on Apr 19, 2022 6:56:06 GMT
Chahta,Hello! My current bond funds are only TWO: PRFRX. FR/BL. And I just took a big slug of that and added to PRNEX with it. (Nat. Res.). PRNEX is mediocre, but I'm married to TRP in the IRA. The other is TUHYX. Domestic HY. Down bigly, YTD. Stinks. But I think I'll hold on. I always re-invest all bond divs. I've done that from the start, years ago. ..... PRFRX is "dead money" riding the zero-line, this year, so far. If TUHYX falls much further, I just might scoop up some cheaper shares in the HY fund. Isn't the carnage pretty well past--- at least the worst of it?
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Post by Chahta on Apr 19, 2022 15:38:26 GMT
Read this over at MFO. Interesting contrarian POV.
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Post by mozart522 on Apr 19, 2022 16:42:29 GMT
Read this over at MFO. Interesting contrarian POV. What is contrarian about it?
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Post by retiredat48 on Apr 19, 2022 17:03:31 GMT
Read this over at MFO. Interesting contrarian POV. What is contrarian about it? I agree in that I do not see anything "contrarian" in the article. But to me the article is a useful review of the markets and interest rates...two articles are included. I notice the bond RULE OF THUMB is cited...one's total return closely approximates the starting rate one invests in bonds, regardless of interest rate changes. Also, the conclusion that higher interest rates are GOOD for bond investors in the long run. Yes, it is low rates that are the killer. R48
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Post by Chahta on Apr 19, 2022 17:04:17 GMT
mozart522 retiredat48 , the last 2 sentences. Most people here it seems are selling bonds with no patience. They have gone to cash. I suppose one can be patient "out of bonds" but that is not what this article is about.
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Post by mozart522 on Apr 19, 2022 18:54:04 GMT
But why should I want bond yields to rise WHILE I OWN THEM? For example, the FED will likely be raising rates to around 3% or more by year-end in .5% chunks. This is based on statements from some of the bank presidents. Why not sit in cash until then and then follow the yields up, ultra ST first, then ST bonds, wait until intermediate reacts with higher yields, and then go into them. By patiently waiting in cash until I can get high ST yields, I'm protected if the FED decides to drop rates again to help the economy. I'm not disagreeing with the rule of thumb, I'd just like to start at a higher yield. VGSH down another .2% today.
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Post by bb2 on Apr 19, 2022 19:24:56 GMT
Some rules still apply. Don't fight the fed. Up or down. And they always tell you what they're going to do. Sell your bonds. Still time, though much has been missed.
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Post by FD1000 on Apr 19, 2022 22:16:04 GMT
If you are thinking about selling bonds, most of the damage already done.
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Post by richardsok on Apr 19, 2022 23:07:35 GMT
If you are thinking about selling bonds, most of the damage already done. Probably. But maybe not all of it.
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Post by Chahta on Apr 19, 2022 23:30:41 GMT
But why should I want bond yields to rise WHILE I OWN THEM? For example, the FED will likely be raising rates to around 3% or more by year-end in .5% chunks. This is based on statements from some of the bank presidents. Why not sit in cash until then and then follow the yields up, ultra ST first, then ST bonds, wait until intermediate reacts with higher yields, and then go into them. By patiently waiting in cash until I can get high ST yields, I'm protected if the FED decides to drop rates again to help the economy. I'm not disagreeing with the rule of thumb, I'd just like to start at a higher yield. VGSH down another .2% today. That is why it was contrarian. It was originally posted at MFO by someone with a contrarian point of view.
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Post by mozart522 on Apr 20, 2022 0:53:52 GMT
But why should I want bond yields to rise WHILE I OWN THEM? For example, the FED will likely be raising rates to around 3% or more by year-end in .5% chunks. This is based on statements from some of the bank presidents. Why not sit in cash until then and then follow the yields up, ultra ST first, then ST bonds, wait until intermediate reacts with higher yields, and then go into them. By patiently waiting in cash until I can get high ST yields, I'm protected if the FED decides to drop rates again to help the economy. I'm not disagreeing with the rule of thumb, I'd just like to start at a higher yield. VGSH down another .2% today. That is why it was contrarian. It was originally posted at MFO by someone with a contrarian point of view. LOL OK. I'm thinking that it isn't contrarian because it is the general and common advice given by advisors and articles all the time. You were apparently thinking it is contrarian to those of us here that are holding cash in lieu of bonds. Anyway, thanks for posting it. Normally I would follow that advice, but the FED has all but guaranteed moving up to 3% and bond holders are likely to feel more pain.
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Post by chang on Apr 20, 2022 4:57:28 GMT
If you are thinking about selling bonds, most of the damage already done. I'm not sure about that. Yogi said that about IT-IG about six months ago when I sold the last of my DODIX. He erred. Two days ago Barrons published an article saying munis were now a buy. I sold all my VWALX anyway. Yesterday it dropped another 0.65%. As I’ve said (too many times, I know), I look at the 10Y yield from 1985-2021. Straight line down, more or less, from 12% to 0%. Now yields are reverting to the mean. What the “mean” is, I don’t know, but with downward pressure on prices likely to continue for years, who wants bonds?
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on Apr 20, 2022 12:38:17 GMT
What do do about IG bonds? Grit your teeth and hold them. Occasionally rebalance to maintain your AA.
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Post by FD1000 on Apr 20, 2022 12:38:48 GMT
If you are thinking about selling bonds, most of the damage already done. I'm not sure about that. Yogi said that about IT-IG about six months ago when I sold the last of my DODIX. He erred. Two days ago Barrons published an article saying munis were now a buy. I sold all my VWALX anyway. Yesterday it dropped another 0.65%. As I’ve said (too many times, I know), I look at the 10Y yield from 1985-2021. Straight line down, more or less, from 12% to 0%. Now yields are reverting to the mean. What the “mean” is, I don’t know, but with downward pressure on prices likely to continue for years, who wants bonds? You are correct. I don't have an idea about the future but I also know that my 2 favorite categories, HY Munis + Multi will shine again in months, not years. As always, I'm waiting for an uptrend. We are going to see pockets of opportunities trades. BTW, I'm in guerilla mode. I only allowed to make ST trades(days) but stay in cash otherwise. Meanwhile, if you must own bonds, VTIP looks as a reasonable compromise, maybe. Why VTIP And STIP Are The Stock Market's Best GroundhogsVTIP: Safe Holdings, 5.5% Yield, Effective Inflation Hedge
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Post by Chahta on Apr 20, 2022 12:54:44 GMT
What % for VTIP for effective inflation hedging?
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Post by Chahta on Apr 20, 2022 13:00:42 GMT
If you are thinking about selling bonds, most of the damage already done. I'm not sure about that. Yogi said that about IT-IG about six months ago when I sold the last of my DODIX. He erred. Two days ago Barrons published an article saying munis were now a buy. I sold all my VWALX anyway. Yesterday it dropped another 0.65%. As I’ve said (too many times, I know), I look at the 10Y yield from 1985-2021. Straight line down, more or less, from 12% to 0%. Now yields are reverting to the mean. What the “mean” is, I don’t know, but with downward pressure on prices likely to continue for years, who wants bonds? Whay was holding DODIX in 2019 any different from now if the 10Y was going downhill then? How can yields be reverting when they are going up? Isn't "the mean" the difference from hi to lo? What is that number?
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Deleted
Deleted Member
Posts: 0
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Post by Deleted on Apr 20, 2022 13:05:31 GMT
"What % for VTIP for effective inflation hedging?"
When inflation is high like now, 0%.
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Post by FD1000 on Apr 20, 2022 13:22:13 GMT
What % for VTIP for effective inflation hedging? There are no easy answers ( link). The hardest thing is to predict the future. There is a good reason why I never invested in TIPS. "A common misconception is that TIPS protect investors from overall inflation more effectively than U.S. Treasuries in the short-term, but this is not necessarily correct; TIPS will provide better (or worse) inflation protection than U.S. Treasuries only when differences exist between actual and expected inflation." I like the...Conclusion "In conclusion, TIPS are constructed to be a better inflation hedge within the U.S. Treasury bond family, and continue to play an important role in strategic asset allocations. However, TIPS should not be thought of as a hedge for rising interest rates. Additionally, unless investors require a default-free instrument, we believe that other investment options such as high yield bonds and floating rate bank loans may provide more “bang for your buck” with regard to tactical hedging and/or bolstering of investment returns. As always, the credit and liquidity risks of these instruments must first be weighed against the investor’s constraints and risk tolerance."
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Deleted
Deleted Member
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Post by Deleted on Apr 20, 2022 13:37:29 GMT
If you want to hedge a portfolio, there are alternative and sector funds. I recently added a managed futures fund.
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mikes425
Commander
generally happy in semi-retirement and dividend income-land
Posts: 126
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Post by mikes425 on Apr 22, 2022 0:38:13 GMT
mozart522 retiredat48 , the last 2 sentences. Most people here it seems are selling bonds with no patience. They have gone to cash. I suppose one can be patient "out of bonds" but that is not what this article is about. >>If you’re a long-term investor who utilizes bonds in their portfolio, you should want rates to rise. It’s a good thing in the long run. You just need some patience in the short run to get there.<<
And i think this is an important point to help maintain perspective. Thanks for the link.
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Post by retiredat48 on Apr 22, 2022 17:12:36 GMT
To investors in RPHIX.
I did not listen in on the zoom conference call.
Would like to see what makes it attractive.
So two questions...does anyone know the current, or last 30 day yield?? What is the actual current return (M* is silent on any SEC yield).
Second question...RPHIX owns junk bonds (I am not against that). If a junk bond has 75 days left to maturity, and a company declares bankruptcy, these bonds will be like all other bonds--not paid. Is this not correct? A defaulted bond can have adverse effect on RPHIX--no?
So if the fed gets too aggressive, and the economy turns down swiftly, we would certainly see more defaults among companies. Thus, we must acknowledge the risk is higher in RPHIX, versus a treasury bond fund--no?
Comments appreciated.
R48
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Post by mozart522 on Apr 22, 2022 23:01:09 GMT
mozart522 retiredat48 , the last 2 sentences. Most people here it seems are selling bonds with no patience. They have gone to cash. I suppose one can be patient "out of bonds" but that is not what this article is about. And yet ST Treasury index lost another .35% since you wrote that. It is now down 3% YTD on the safest bond fund there is. It has a duration of 2 years and it seems to have priced in much of the anticipated raise in rates, but the anticipated raise may well be low. The FED needs to kill demand. To me, that means slow the economy, and cause people to pay more for interest on loans of any type. This will slow inflation and wage growth. And if they overshoot, we will have recession sooner than later. But Joe sixpack will not tolerate 9% inflation for long. I look for several .5% raises and quite possibly a .75 or two if inflation doesn't moderate quickly. In any event, by fall I believe yields will be higher and risk of price decline in bonds will be lower. That is my idea of patience.
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Post by retiredat48 on Apr 22, 2022 23:34:03 GMT
mozart522 ,...I didn't inv est in YTD. Yes, a small decline so far. I made one purchase, and since then, we have the fed getting even more hawkish, and recently Powell announcing the fed may go "above the neutral rate." This is quite a pivot. The neutral rate is viewed as 2.5%. If fed was at neutral, the 2 yr treasury follows that rate closely, so expected 2.6% at about good compelling value. Now however, if go above neutral, that may mean fed rate at 3% (by year end)...and a 2 yr treasury at 3-3.2%. So two yr has fallen further,(Yield toDay High2.789%; Yield Day Low2.69%; Yield Close2.69%;note we had a rally at the close. So I plan to buy more. The question is now, with a pretty compelling yield, OR wait until the May fed meeting, when they announce 50 bp increase (or 75), ie, buy on the "bad news." I decide every day! The market will not "ring a bell" when the 2-year has peaked. But the higher it goes, the quicker and more severe a recession may be in the cards...and the fed rate either stopped increasing, or actually lowered. R48
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Post by mozart522 on Apr 23, 2022 0:29:37 GMT
retiredat48, I don't disagree with that. I think you will do fine. But I ask myself, "how much will I really get in either income or price appreciation on VGSH over the next 6 months as opposed to sitting in cash". My answer is not enough at this point for the risk (although admittedly small). And to get anything worthwhile, I would have to take a large commitment, which of course, increases the potential risk. I'm waiting for intermediates to be a compelling, lower-risk buy with my cash.
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Post by richardsok on Apr 24, 2022 19:55:03 GMT
retiredat48 , I don't disagree with that. I think you will do fine. But I ask myself, "how much will I really get in either income or price appreciation on VGSH over the next 6 months as opposed to sitting in cash". My answer is not enough at this point for the risk (although admittedly small). And to get anything worthwhile, I would have to take a large commitment, which of course, increases the potential risk. I'm waiting for intermediates to be a compelling, lower-risk buy with my cash. VGSH still trending bearish.
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