Bonds?

[Deleted]

I have only 3% in Bonds, all from Vanguard Wellington. I have 6-10 years to retirement.

I am considering moving to 80% Stock - 20 % Bond portfolio over next 1 year. Fidelity free software with fancy monte carlo simulation says 80-20 is better for my retirement than my current allocation.

Seems like it is a good time to start DCA into some of these bond funds such as PDI.

What bonds funds, etfs, CEFS should I consider?

[Deleted]

Aug 27, 2022 15:30:17 GMT @waffle said:

I have only 3% in Bonds, all from Vanguard Wellington. I have 6-10 years to retirement.

I am considering moving to 80% Stock - 20 % Bond portfolio over next 1 year. Fidelity free software with fancy monte carlo simulation says 80-20 is better for my retirement than my current allocation.

Seems like it is a good time to start DCA into some of these bond funds such as PDI.

What bonds funds, etfs, CEFS should I consider?

The Fidelity Investor Community (membership required for access) has helpful threads on CEFs. 

[Deleted]

I have opted for a similar allocation, but given my circumstances am leaning towards even less up to 90-10. I feel comfortable my dividends will produce needed income and have other income streams I can rely on.

I would lay out what role you want the bonds to play and plan an allocation from there. I am waiting until there is less interest rate risk to decide. I am going to keep 2-3 years expenses in a stable value fund I have available (G fund). The bulk of what is left I would ideally like to put in BND or BIV, with the balance in VWEHX.

[yogibearbull]

Stable-value (SV) funds (within retirement plans) remain good options. August rates are:

TSP G Fund 2.875%
TIAA Traditional - RA (restricted) 5.50%
TIAA Traditional - SRA 4.75%

[ECE Prof]

I am dumping all my new cash and the distributions into equities (VOO, VGT, SCHD, and TQQQ) now because I consider them to be very cheap now. Even if the markets go down now, we know that they would eventually go back up sometime in the near future. The companies will adjust their dividend distributions commensurate with the prevailing interest rates to attract and keep more shareholders. Besides, today's 2% dividend would be worth an equivalent of 8% in about a decade or so. Moreover, dividend streams are tax efficient in a taxable account.

I understand that there is no revenue or earnings recession so far for most companies, except for some dying companies like AMC. Who wants to go to a theater when you can stream the stuff in your living room? That could change. Nobody knows the future, but I am always optimistic about the future. I cancelled the YouTube TV back in April, but that does not mean that I do not get entertainment. YouTube has become a streaming source for both News and entertainment. They have commercials for Spectrum (our cable), Kroger, and a good deal of local stuff, just like old TV, but I do not need to pay for cable service. That means, inefficient old stuff will die, and something else will replace. One good thing about YouTube is that I get entertainment in my own mother tongue, and I get to watch what I enjoyed in my young days when I was growing up. Can you get it in your cable channels or from Nashville? How about that?

[mozart522]

I have 80% of my portfolio in T-bills right now. I fully expect lower lows before this is over. 8-9% inflation with low unemployment will take a long time to work out and I don't see how a recession is avoidable. I'm OK making 2.5 to 3.5% until things clear up.

[FD1000]

Aug 27, 2022 18:25:45 GMT ECE Prof said:

I am dumping all my new cash and the distributions into equities (VOO, VGT, SCHD, and TQQQ) now because I consider them to be very cheap now. Even if the markets go down now, we know that they would eventually go back up sometime in the near future. The companies will adjust their dividend distributions commensurate with the prevailing interest rates to attract and keep more shareholders. Besides, today's 2% dividend would be worth an equivalent of 8% in about a decade or so. Moreover, dividend streams are tax efficient in a taxable account.

I understand that there is no revenue or earnings recession so far for most companies, except for some dying companies like AMC. Who wants to go to a theater when you can stream the stuff in your living room? That could change. Nobody knows the future, but I am always optimistic about the future. I cancelled the YouTube TV back in April, but that does not mean that I do not get entertainment. YouTube has become a streaming source for both News and entertainment. They have commercials for Spectrum (our cable), Kroger, and a good deal of local stuff, just like old TV, but I do not need to pay for cable service. That means, inefficient old stuff will die, and something else will replace. One good thing about YouTube is that I get entertainment in my own mother tongue, and I get to watch what I enjoyed in my young days when I was growing up. Can you get it in your cable channels or from Nashville? How about that?

As discussed before, your situation is unique, not available for most.  Add your age to the mix, and it's even more unique. I know several ex profs(mostly in finance, accounting), they are younger than you, around 75 years old.  Their pensions/SS + the wife SS/pension cover all their expenses + a nice portfolio. 
I also know several MDs, many specialists (Ortho, Cardio, surgery).  They have, by far, the biggest portfolios with high % in stocks.
All are mostly in stocks. Most own expensive homes, drive luxury vehicles and take weeks of vacation.

None of the above own CEFs. They stay the course, hardly do anything, an easy option...GOOD and proper FOR THEM.

[FD1000]

Aug 27, 2022 15:30:17 GMT @waffle said:

I have only 3% in Bonds, all from Vanguard Wellington. I have 6-10 years to retirement.

I am considering moving to 80% Stock - 20 % Bond portfolio over next 1 year. Fidelity free software with fancy monte carlo simulation says 80-20 is better for my retirement than my current allocation.

Seems like it is a good time to start DCA into some of these bond funds such as PDI.

What bonds funds, etfs, CEFS should I consider?

Consider your bond CEFs as part of your stocks. 80% stocks + 20% leverage CEFs (such as Pimco PDI) should be considered as or close to 100% in risky stuff.  As long as you know and understand it, you are OK.

I would discuss CEFs under the CEF forum. I would follow seekingalpha.com/author/alpha-gen-capital and use it for ideas/selections.

[ECE Prof]

Aug 28, 2022 17:49:17 GMT FD1000 said:

Aug 27, 2022 15:30:17 GMT @waffle said:

I have only 3% in Bonds, all from Vanguard Wellington. I have 6-10 years to retirement.

I am considering moving to 80% Stock - 20 % Bond portfolio over next 1 year. Fidelity free software with fancy monte carlo simulation says 80-20 is better for my retirement than my current allocation.

Seems like it is a good time to start DCA into some of these bond funds such as PDI.

What bonds funds, etfs, CEFS should I consider?

Consider your bond CEFs as part of your stocks. 80% stocks + 20% leverage CEFs (such as Pimco PDI) should be considered as or close to 100% in risky stuff.  As long as you know and understand it, you are OK.

I would discuss CEFs under the CEF forum. I would follow seekingalpha.com/author/alpha-gen-capital and use it for ideas/selections.

FD

I visited your site yesterday and have bookmarked it. But, I could not find your portfolios during the different periods, including the current one.  Where are they? The "seeking alpha link" is not only a click biter, but also advisors, trying to sell something. These guys want you to be a trader, but I am not. I do not follow the "click biters." Thanks, no thanks.

[steelpony10]

Aug 27, 2022 15:30:17 GMT @waffle said:

I have only 3% in Bonds, all from Vanguard Wellington. I have 6-10 years to retirement.

I am considering moving to 80% Stock - 20 % Bond portfolio over next 1 year. Fidelity free software with fancy monte carlo simulation says 80-20 is better for my retirement than my current allocation.

Seems like it is a good time to start DCA into some of these bond funds such as PDI.

What bonds funds, etfs, CEFS should I consider?

          You’re pretty close to Buffet’s VOO 90% and cash 10%. I assume a spendown investor? Why don’t you simulate your own personal situation and projections with several personalized portfolios and see what you can live with? At 6-10 years out I think you should be in or near the set it and forget it stage.

           I don’t know what the 20% bonds are for. If safe money, then go safe. No cash? Adjust only when your financial needs factually change or fiddle constantly? Can you live with 30% portfolio value drops for an indefinite time? How? What’s the plan for that meaning a secondary source of income while you wait. What about a sudden jump in monthly needs like home health care or worse and a drop in values that you spendown? We tried to work this all out about 7 years before retirement.

           Monte Carlo simulations had nothing to do with our long term needs and goals. We concentrated on the worse case scenario’s while staying within our risk parameters. The more you risk the easier it is to manage the worse case scenario’s.

          

[FD1000]

Aug 28, 2022 18:59:28 GMT ECE Prof said:

Aug 28, 2022 17:49:17 GMT FD1000 said:

FD

I visited your site yesterday and have bookmarked it. But, I could not find your portfolios during the different periods, including the current one.  Where are they? The "seeking alpha link" is not only a click biter, but also advisors, trying to sell something. These guys want you to be a trader, but I am not. I do not follow the "click biters." Thanks, no thanks.

Observations:
1) You don't spend enough time searching stuff and why you miss on ideas.  It's also true that most articles/narrative is useless, there is no other choice, but it takes me a very short time reading quickly to see if it's worth anything.
2) My site main (link). Under that, you find my trading system(link).  Read both.
3) I gave a link to CEF information, not a click biter or promote to buy anything.  IMO, the articles are good as in insight to CEFs + recommendation what to buy + trade. I suggest you spend some times reading these articles.  You may learn something. Maybe you don't care to learn and think you got it, I always educate myself.
4) It's not a secret, I think that most should not use CEFs. It's not only my idea but a common investing idea. On the other hand, trading CEFs, is a better idea for GOOD traders, but then again, stocks will make you more money LT. Performance is the ultimate indicator to how you do. In some market conditions and for specific CEFs, you will make more money using CEFs.  
5) The simple fact is that CEFs were a terrible investment in the last 3-5 years and that's not a small change. If KISS investing is so easy, why so many investors try other stuff spending hours just to come short.

[alvinthechipmunk]

6-10 years to retirement, @waffle. I don't think monte carlo is helpful, much. I aimed for and implemented the traditional 60 stock/40 bonds retirement portfolio until this year, after humpty dumpty fell off the wall. time to re-evaluate. i'm at 20 percent bonds currently. the purpose is ballast, and as a backup source of monthly income if we need it. electric bill or gas for the car. but so far, we are able to just reinvest the profits.

now is time for a look at what david giroux is buying recently. prwcx. i should have thought about that sooner. but his fund is already one-third of my total. stocks are down, even after the summer bear-rally. hell, the market gave back 3 percent in a day, on last friday.

disclosure: wife works full-time, still. I'm 68. I have a minimal token being taken monthly, going into the TRP brokerage. Look at LND. NHYDY. BHB. Those are on my list. I already own BHB.

the main thing is just to plan prudently. i continue to live beneath my means. a nice problem to have. we were in the old family home back east. until 2019. crime victims, 3 times in 3 years. a shit-hole city these days. so, we got out, after selling, driving across the country and giving the jeep to my son. our down-sized apartment works great for us. and i don't ever have to shovel the RAIN.

[Chahta]

Aug 27, 2022 15:30:17 GMT @waffle said:

I have only 3% in Bonds, all from Vanguard Wellington. I have 6-10 years to retirement.

I am considering moving to 80% Stock - 20 % Bond portfolio over next 1 year. Fidelity free software with fancy monte carlo simulation says 80-20 is better for my retirement than my current allocation.

Seems like it is a good time to start DCA into some of these bond funds such as PDI.

What bonds funds, etfs, CEFS should I consider?

What are you looking to get out of 80/20? Do you assume bond funds will give you a great TR? Bonds funds can provide good TR at times, but they are mainly for the yield. If you are not interested in yield then why buy bond funds? Of course in "normal" times they should fluctuate less than equities and you can reinvest interest paid to build a bigger position to pay more interest in the future. I agree that now is a good time to buy bond funds since they are beaten down and pretty cheap. I was 100% equities until 2 years before retirement. I do not take any income from my IRAs so as long as they are tilted for growth that is all I care about. Now if you are interested in tax-free income then think about munis in your taxable account.

With bond funds your thought can't be "why are these darn things not going up like my stocks"? They will frustrate you if you think that way.

[richardsok]

Aug 29, 2022 13:25:07 GMT Chahta said:

Aug 27, 2022 15:30:17 GMT @waffle said:

I have only 3% in Bonds, all from Vanguard Wellington. I have 6-10 years to retirement.

I am considering moving to 80% Stock - 20 % Bond portfolio over next 1 year. Fidelity free software with fancy monte carlo simulation says 80-20 is better for my retirement than my current allocation.

Seems like it is a good time to start DCA into some of these bond funds such as PDI.

What bonds funds, etfs, CEFS should I consider?

What are you looking to get out of 80/20? Do you assume bond funds will give you a great TR? Bonds funds can provide good TR at times, but they are mainly for the yield. If you are not interested in yield then why buy bond funds? Of course in "normal" times they should fluctuate less than equities and you can reinvest interest paid to build a bigger position to pay more interest in the future. I agree that now is a good time to buy bond funds since they are beaten down and pretty cheap. I was 100% equities until 2 years before retirement. I do not take any income from my IRAs so as long as they are tilted for growth that is all I care about. Now if you are interested in tax-free income then think about munis in your taxable account.

With bond funds your thought can't be "why are these darn things not going up like my stocks"? They will frustrate you if you think that way.

ICYMI ---   PDI technical signals are turning iffy.    Not a suggestion; merely an observation.

[Deleted]

Aug 29, 2022 7:15:58 GMT alvinthechipmunk said:

6-10 years to retirement, @waffle . I don't think monte carlo is helpful, much. I aimed for and implemented the traditional 60 stock/40 bonds retirement portfolio until this year, after humpty dumpty fell off the wall. time to re-evaluate. i'm at 20 percent bonds currently. the purpose is ballast, and as a backup source of monthly income if we need it. electric bill or gas for the car. but so far, we are able to just reinvest the profits.

now is time for a look at what david giroux is buying recently. prwcx. i should have thought about that sooner. but his fund is already one-third of my total. stocks are down, even after the summer bear-rally. hell, the market gave back 3 percent in a day, on last friday.

disclosure: wife works full-time, still. I'm 68. I have a minimal token being taken monthly, going into the TRP brokerage. Look at LND. NHYDY. BHB. Those are on my list. I already own BHB.

the main thing is just to plan prudently. i continue to live beneath my means. a nice problem to have. we were in the old family home back east. until 2019. crime victims, 3 times in 3 years. a shit-hole city these days. so, we got out, after selling, driving across the country and giving the jeep to my son. our down-sized apartment works great for us. and i don't ever have to shovel the RAIN.

I already own 4 of top 10 PRWCX stocks (MSFT, APPL, AMZN, TMO). I do follow prwcx portfolio monthly. 

To answer Chahta's post: Fidelity free planning software showed that there is better probability of my funds outlasting my retirement with 80-20 portfolio than 90-10. Actually it shows  that 60-40 is even better which is making me rather doubtful about the fidelity software. It also shows that I leave a lot more at end with 80-20%. Yes I can wait to move to 80-20.

[Deleted]

Anyone buying bonds and which ones?

[ECE Prof]

10-year has passed 3.70 today - 5.64% increase in the yield. Amazing drop in the US treasuries. The Bond CEFs also went down the hill along with them.

[habsui]

I have parked some cash in 3-6 months treasuries and (brokered) CDs.

Also, starting to nibble again on munis..