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Post by Chahta on May 25, 2022 15:23:19 GMT
Ha! Stock discussion in a bond forum. At least there were no charts posted.
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Post by fishingrod on May 25, 2022 15:23:48 GMT
chang, says, "I look at bonds as something where NAV doesn't vary on average, and you collect a regular dividend." I don't believe that for a second. Bonds and especially muni bonds get mis priced or have had a scare almost every four to five years on average. Didn't you take advantage of the Whitney scare?
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Post by Capital on May 25, 2022 15:24:53 GMT
There may be some short term gyrations; however, I think there will be more pain in the future for bondholders. For the time being I do not want to be in bond funds or EFTs. Historically rates are still extremely low. Chart
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Bonds
May 25, 2022 15:29:14 GMT
Post by chang on May 25, 2022 15:29:14 GMT
chang , says, "I look at bonds as something where NAV doesn't vary on average, and you collect a regular dividend." I don't believe that for a second. Bonds and especially muni bonds get mis priced or have had a scare almost every four to five years on average. Didn't you take advantage of the Whitney scare? You got me. I did load up on muni CEFs during the Whitney scare, and slowly sold them off over the next few years. But from the B&H retiree's perspective, bonds are for ballast and stable income. Over the long term, NAVs must remain the same (except for the impact of defaults). I have no problem with opportunism and bottom fishing; my point is just that (1) that's somewhat peripheral to what most bondholders own bonds for, and (2) there are other, more enticing targets for that. (I-M-O!)
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Bonds
May 25, 2022 15:30:47 GMT
Post by Chahta on May 25, 2022 15:30:47 GMT
In case my linked quote of YBB required Twitter to display.
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Bonds
May 25, 2022 15:36:55 GMT
Post by fishingrod on May 25, 2022 15:36:55 GMT
chang, ING with a 10% yield and negative 35% over last five years. This purchase is play money or just a small gamble, right?
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Post by chang on May 25, 2022 15:44:42 GMT
chang , ING with a 10% yield and negative 35% over last five years. This purchase is play money or just a small gamble, right? I haven't owned it for five years, only a few weeks. Of course it's a small position now, but I could see growing it "pyr-up" style. After all, the yield doesn't mean anything if the cash flow isn't meaningful. I'll probably add a bucket with every 5-10% increase in NAV. (We should probably continue any further discussion in the Stock Squad forum.)
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Post by FD1000 on May 25, 2022 15:55:11 GMT
I'm hearing people talk about buying bonds as if they were fishing for a bottom. "Oversold", "getting bought up", "rally", etc. - these are trader's terms, not the lingo of an investor looking for stable income. If you can snag an oversold bond and ride the bump, that's great. But there are plenty of stocks that offer the same opportunity. I look at bonds as something where NAV doesn't vary on average, and you collect a regular dividend. From that perspective, it seems early. That's true for most typical investors who hold for years. Someone mentioned NHMAX. If you joined most of the upside and avoided most of the downside, you made a lot more. We should never discuss one stock vs a fund. Stocks always have better upside, but the downside is huge too. Stocks ETF also have huge upside/downside moves. The bond situation is unique and why Q1/2020 was the worst quarter for treasuries in decades. While stocks can continue going down or zig-zag for years (see 2000-2010 when SP500 lost 10% in 10 years), bonds have done it in months. Only problem, it's a different world now with inflation, war, Fed intervention or not, supply chains. Lots of moving parts. It was definitely a good trade in the last several days. Fed minutes will be out at 2 PM. The Fed is the biggest force and many don't give them the respect, just like Rodney Dangerfield "I don't get no respect!" Disclaimer: I never owned bond funds just to collect distributions, starting from the glory days of PIMIX in 2011 to now.
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Post by chang on May 25, 2022 18:54:25 GMT
“If you joined most of the upside and avoided most of the downside, you made a lot more.”
If I knew how to do that, I would invest all my money in penny stocks, which gyrate wildly. Or maybe I’d be trading rubles. Municipal bonds are probably the last asset class I’d use my magic on.
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Bonds
May 25, 2022 19:36:04 GMT
Post by FD1000 on May 25, 2022 19:36:04 GMT
“If you joined most of the upside and avoided most of the downside, you made a lot more.” If I knew how to do that, I would invest all my money in penny stocks, which gyrate wildly. Or maybe I’d be trading rubles. Municipal bonds are probably the last asset class I’d use my magic on. That's correct if you don't mind the volatility. The highest performance comes with high volatility. The trick, at least for me, is to have the performance I need/want with the lowest volatility possible. Anybody can buy 3-5 funds and go to sleep. It's pretty difficult to have Sharpe ratio over 2 and still have reasonable performance. If I can get 6% average annually in the next several years with inflation about 3% without ever losing 3%, I would be very pleased. Actually, these numbers will please me for the next 20 years. I stopped trying to convince anybody.
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Post by Chahta on May 25, 2022 21:31:33 GMT
fishingrod , FD1000 , I heard Charlie Gasparino (Fox Business) report today that money managers he knows believe inflation is not the main issue now. It is the coming recession and they believe undervalued munis are the place to be. That would explain the sudden move that had munis move up in tandem with rate increases of TNX on Monday.
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Post by fishingrod on May 25, 2022 21:54:29 GMT
fishingrod , FD1000 , I heard Charlie Gasparino (Fox Business) report today that money managers he knows believe inflation is not the main issue now. It is the coming recession and they believe undervalued munis are the place to be. That would explain the sudden move that had munis move up in tandem with rate increases of TNX on Monday. I agree and had noticed the disconnect in yields a week or two back.
Inflation and interest rate scare/shock/risk will come back again a little when the FED raises again in June, but will subside after. It should be baked in but I still think there will be some bond market moves. IMO
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Deleted
Deleted Member
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Bonds
May 25, 2022 22:44:02 GMT
Post by Deleted on May 25, 2022 22:44:02 GMT
PIMIX is looking better, too. Its effective duration and maturity are each about 1 year. Mainly global government credit in portfolio top 10.
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Post by FD1000 on May 26, 2022 3:23:52 GMT
PIMIX is looking better, too. Its effective duration and maturity are each about 1 year. Mainly global government credit in portfolio top 10. I held PIMIX from 2011 to 01/2018 and never bought it again....wow, already more than 4 years without my first bond love. Duration doesn't guarantee lower volatility or anything else, especially a fund like PIMIX that invests now globally, chasing high income and riskier categories such as HY and EM bonds. PIMIX performance in the last 3 year ranks at 46. It's AUM=128 billion is huge, and makes it harder to execute. Its yield isn't high as it used to be and there are others with higher yield. See below several choices from my list. You have to find what you like based on your goals. Attachments:
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Bonds
May 26, 2022 8:10:55 GMT
Post by oldskeet on May 26, 2022 8:10:55 GMT
Hi guys, Most everything in my fixed income sleeve was up yesterday with FLAAX performing the best being up 1.26%. From my perspective this is no more than a throw back rally since most fixed income funds have gotten over sold. I am looking for more pain in June when the FOMC raises rates again should they follow through in their previous announcements. For now, I have put a hold on my fixed income buys. However, I might do some buying in my hybrid income sleeve. Old_Skeet
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Deleted
Deleted Member
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Post by Deleted on May 26, 2022 9:51:47 GMT
Hi OS -
First, let me say I have NO idea how bonds or equities will do. Rate of inflation could be a wild card here. Money supply decreased some massive amount which would affect any future increase (that which is baked in, has to be eaten regardless). I am sure the markets are starting to price that in - number (decrease) came out Tuesday. I couldn't find it, but it was unexpected.
So, maybe looking further out, inflation might moderate quicker than thought when last money supply figure came out. Maybe the Fed says they will take liquidity out more slowly going forward and let us eat the cooking they have already served? Avoid a potential mistake/recession? Bond yields moderate a bit more than expected?
Lots of maybes there! Next week and month should be very interesting and I like your wait and see attitude in this area.
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Deleted
Deleted Member
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Post by Deleted on May 26, 2022 12:14:29 GMT
I am doing my best to not buy more of anything while the market is consolidating.
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Post by mozart522 on May 26, 2022 12:30:43 GMT
Income investing 101: One of Jack bogle's 12 Pillars of Wisdom:
"Pillar 9. You May Have a Stable Principal Value or a Stable Income Stream, But You May Not Have Both. Contrast a money market fund—with its volatile income stream and fixed value— and a long-term government bond fund—with its relatively fixed income stream and extraordinarily volatile market value. Intelligent investing involves choices, compromises, and trade-offs, and your own financial position should determine the most suitable combination for your portfolio."
As you go out the maturity curve, you get more stable income and less stable NAV. How many wouldn't jump on a 12%, 30 year bond today?
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Bonds
May 26, 2022 12:34:53 GMT
Post by uncleharley on May 26, 2022 12:34:53 GMT
Do you have a 30 yr 12% bond for sale?
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Bonds
May 26, 2022 12:45:05 GMT
Post by mozart522 on May 26, 2022 12:45:05 GMT
Do you have a 30 yr 12% bond for sale? In my time machine back to the 80's
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Bonds
May 28, 2022 3:39:19 GMT
Post by FD1000 on May 28, 2022 3:39:19 GMT
“If you joined most of the upside and avoided most of the downside, you made a lot more.” If I knew how to do that, I would invest all my money in penny stocks, which gyrate wildly. Or maybe I’d be trading rubles. Municipal bonds are probably the last asset class I’d use my magic on. That's correct if you don't mind the volatility. The highest performance comes with high volatility. The trick, at least for me, is to have the performance I need/want with the lowest volatility possible. Anybody can buy 3-5 funds and go to sleep. It's pretty difficult to have Sharpe ratio over 2 and still have reasonable performance. If I can get 6% average annually in the next several years with inflation about 3% without ever losing 3%, I would be very pleased. Actually, these numbers will please me for the next 20 years. I stopped trying to convince anybody. If you don't believe, all you got to do is to watch HY munis since last week. In fact NHMAX beat SPY...what? I made around trip investing a very high % and sold today. Why? Because I don't trust this market but I know when I see a huge momo. I'm thinking rates will increase. Regardless, I'm patient this year and try to make the best trades. This time, I waited for my ST+LT indicators to flash. In a good market, I may act sooner. This is what I did several weeks ago with HDV and got burned but sold immediately with -0.15 loss. This time I made a lot more. BTW, only Schwab (not Fidelity or VG) let you buy Muni funds in IRA. Attachments:
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Bonds
Jun 14, 2022 0:24:37 GMT
Post by alvinthechipmunk on Jun 14, 2022 0:24:37 GMT
WHY is the 10-year (and 5 and 2, I suppose) rate RISING, when, as I suspect, people are flocking into Treasuries for safety at the moment? This is nuts, eh? And a rate hike comes on Tuesday, tomorrow. More DEMAND should be driving rates DOWN, no? ?
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Post by retiredat48 on Jun 14, 2022 7:00:24 GMT
WHY is the 10-year (and 5 and 2, I suppose) rate RISING, when, as I suspect, people are flocking into Treasuries for safety at the moment? This is nuts, eh? And a rate hike comes on Tuesday, tomorrow. More DEMAND should be driving rates DOWN, no? ? The two year treasury yield follows closely the fed funds rate. Until last couple months the rate was consistent. Then the market woke up and priced in exactly what the fed said they would do…raise rates at future meetings, to get to a “neutral rate” est’d at about 2.5% by Q4. Recent high inflation number has many considering fed will go 50 basis points higher…or 3% on neutral rate. Thus the market is reflecting this new outlook. However, if economy turns downward fast, the fed may pause and not go to 3%…data dependent stuff. Personally, I do not think the fed will get to 3%. Economy showing several signs of fast slowdown. Inflation likely to reduce from peak numbers. The recession cries will be quite loud…fed will chicken out. R48
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galeno
Commander
KISS & STC
Posts: 221
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Bonds
Jun 15, 2022 11:44:20 GMT
via mobile
Post by galeno on Jun 15, 2022 11:44:20 GMT
I just checked out the YTM and YTD performance of 4 TBM ETFs.
Blackrock / Ishares IUAF.L = 2.93% (-12.9% YTD) AGG = 2.89% (-12.5% YTD)
Vanguard 50% VDTY.L + 50% VDCP.L = 3.6% (-12.9%) BND = 3.45% (-12.7% YTD)
There is NO UCITS TBM ETF in Ireland Vanguard so I used 50% mid term US treasuries + 50% US corp bonds as a proxy.
Note that the Vanguard bond ETFs have superior YTM vs those of Blackrock / Ishares.
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Bonds
Jun 29, 2022 18:44:53 GMT
Post by FD1000 on Jun 29, 2022 18:44:53 GMT
2 weeks since my last post: 1) If you want to park your money for at least 6-12 months CD/Treasury yield 2.49-2.96% (from Fidelity) 2) Several categories charts: DODIX=higher rates, VWALX=HY Munis, PIMIX=Multi, HYG=HY...are not convincing. 3) On July 26-27 is the FOMC meeting. CME( link) prediction is for 0.75 raise, which is above normal. 4) After markets collapsed, many experts acknowledged it. Now, they are talking about bottom. Sure, after something lose so much, we are closer to the bottom. 5) A high VIX = high volatility. It's still here. I think many investors can't stand doing nothing, but seldom, it works. Attachments:
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Deleted
Deleted Member
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Post by Deleted on Aug 4, 2022 5:06:20 GMT
Because I just now found it so perceptive and informative and important in today's world, I want to call your attention in advance to an upcoming article on SA titled "Rising Interest Rates And Bond Funds: What You Need To Know". It likely will appear publically in mid-August. The author is seekingalpha.com/author/juan-de-la-hoz . I encourage you to keep an eye out for this. --- Frank
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