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Post by habsui on Nov 1, 2022 17:32:46 GMT
I believe that CEFs provide a larger, regular income stream (if you can ignore the volatility of the principal). A good example is UTG vs XLU. XLU has been a better investment over the years. Also, with CEFs, you have to be concerned about principal erosion. If you like to see larger amounts coming into your bank account, good for you.
Wrt to yield, I find it interesting that people say 3,4,6% without acknowledging inflation. If you read Napier about financial repression, he makes a good argument that "they" will try to keep inflation elevated for years to come, for example 4%, as it makes debt cheaper. If correct, a real (lower risk) yield of 2% sounds good to me.
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Post by retiredat48 on Nov 1, 2022 18:10:11 GMT
Here are the top 20 investors in PDI, some with billions in stake. I am not smarter than these big banks. Of course, they must know something about the CEFs. I can cite more examples. Enough for now.
You can add bond managers such as Gundlach, Bill Gross and Dan Ivacsyn (sp?) have filed, their making large investments in leveraged FI CEFs. R48 |
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Post by retiredat48 on Nov 1, 2022 18:16:05 GMT
Interesting, when I converted my HELOC two years ago to a 3% fixed, for next 17 years, and have that money invested in the market, many stated this was too risky for any retiree to do.
Banks knew that making 3% mortgages was a pending disaster. My gain.
Now, I have concluded I will keep this 3% rate to my death!! Getting ready to lock in from 4.25% (Treasury) to 5.5% or more corporate bonds, 5 to 15 year duration.
And everything on "autopay"...I collect my interest monthly , auto send it to my checking account...auto pay the HELOC monthly...rinse and repeat.
Almost free money!
What a country!
R48
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Post by bobfl on Nov 1, 2022 18:33:58 GMT
I believe that CEFs provide a larger, regular income stream (if you can ignore the volatility of the principal). A good example is UTG vs XLU. XLU has been a better investment over the years. Also, with CEFs, you have to be concerned about principal erosion. If you like to see larger amounts coming into your bank account, good for you.
Wrt to yield, I find it interesting that people say 3,4,6% without acknowledging inflation. If you read Napier about financial repression, he makes a good argument that "they" will try to keep inflation elevated for years to come, for example 4%, as it makes debt cheaper. If correct, a real (lower risk) yield of 2% sounds good to me.
Inflation is complex. House prices went up, a good thing; food prices went up, a bad thing. So what is the net and how much doesn't get covered by normal adjustments like a 8.7% SS increase? Plus most important reinvestment on my annual surplus takes care of a lot. Plus even more important than that is the natural economic cycle when inflation causes super buying opportunities where you can buy at a higher yields offsetting inflation. When inflation comes down, which it does, you get to permanently keep those higher yields. For me, only, I try to use inflation for my benefit, like get the heck out of the market when I confirm inflation is heating up. Yes, you have to pay tax on the capital gains, but you can get back in the market closer to the bottom. |
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Post by bobfl on Nov 1, 2022 18:35:52 GMT
Here are the top 20 investors in PDI, some with billions in stake. I am not smarter than these big banks. Of course, they must know something about the CEFs. I can cite more examples. Enough for now.
You can add bond managers such as Gundlach, Bill Gross and Dan Ivacsyn (sp?) have filed, their making large investments in leveraged FI CEFs. R48 Does it list any? A big advantage these guys have is that they know when to get out. :-) |
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Post by ECE Prof on Nov 1, 2022 19:19:44 GMT
" A big advantage these guys have is that they know when to get out. :-)"
You are right. They do it for me also, when I invest with them. My experience in the 5-years has shown that. So, they have earned my trust because they came through tough days during the pandemic for me.
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Post by steelpony10 on Nov 1, 2022 19:24:06 GMT
Here are the top 20 investors in PDI, some with billions in stake. I am not smarter than these big banks. Of course, they must know something about the CEFs. I can cite more examples. Enough for now.
We must be listed in the 2nd 20. |
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Post by habsui on Nov 1, 2022 19:27:51 GMT
" A big advantage these guys have is that they know when to get out. :-)" You are right. They do it for me also, when I invest with them. My experience in the 5-years has shown that. So, they have earned my trust because they came through tough days during the pandemic for me. How did they get out of for example PDI? It is down 15-16% (Price/NAV) YTD.
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Post by ECE Prof on Nov 1, 2022 20:30:11 GMT
“ A big advantage these guys have is that they know when to get out. :-)” You are right. They do it for me also, when I invest with them. My experience in the 5-years has shown that. So, they have earned my trust because they came through tough days during the pandemic for me. How did they get out of for example PDI? It is down 15-16% (Price/NAV) YTD.
They did/do not get out of CEF. They adjust their holdings appropriately. A lot of people thought that PIMCO has big holdings in Russian bonds. So, they sold. I did not. Guess what, PIMCO had insurance on the holding, and the British insurers were on the hook. But, the Russians made the payment anyway. They are not idiots. People, like CC, simply assume things and sell/buy stuff as if they know everything. A week later, the “back of the envelope” guys eat their own words.
But, I am not smarter than Dan (Ivascyn) or Al Murata. They are doing their job, and I am simply minting the cash.
Add/Edit: I am sorry that I am making many here mad. I am just telling what I am doing. I am cash rich today. By the way, I added HDV with some of my old cash. I still have a lot of old and new cash. I will wait for FED's speak tomorrow.
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Post by Capital on Nov 1, 2022 20:36:31 GMT
" A big advantage these guys have is that they know when to get out. :-)" You are right. They do it for me also, when I invest with them. My experience in the 5-years has shown that. So, they have earned my trust because they came through tough days during the pandemic for me. How did they get out of for example PDI? It is down 15-16% (Price/NAV) YTD.
I've been following the PDI threads all over the internet. It appears that the answer is that they sold for a loss and made money.  |
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Post by habsui on Nov 1, 2022 22:58:17 GMT
How did they get out of for example PDI? It is down 15-16% (Price/NAV) YTD.
I've been following the PDI threads all over the internet. It appears that the answer is that they sold for a loss and made money. It's just a number ... with a dash in front.. |
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Post by ECE Prof on Nov 1, 2022 23:35:41 GMT
How did they get out of for example PDI? It is down 15-16% (Price/NAV) YTD.
I've been following the PDI threads all over the internet. It appears that the answer is that they sold for a loss and made money. Yes, you can because of its previous distributions. There is nothing to joke about this. At 13.34% distribution, do some math, and you will find that you recover the money in 62 months – only 5 years and 2 months. Whatever leftover is your free money. As long as you have the shares, you still keep getting the distributions even after these 5 years and 4 months. It is not like that I had to surrender a big chunk of cash to the state and even after 14 years of retirement, my payout remains only 7.2% with inflation adjustment. A poor investment on my part. This is not a joke, either. This money will stop after both my wife and I die. However, PIMCO's distributions will continue to the one who inherits the shares. This is not a joke, either.
Since I make this kind of money in our ROTH accounts, they are not taxable either, unlike my retirement annuity income from the state that is 100% taxable. Right there, I save more than 20%. This is not a joke, either.
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Post by habsui on Nov 2, 2022 1:32:30 GMT
I've been following the PDI threads all over the internet. It appears that the answer is that they sold for a loss and made money. Yes, you can because of its previous distributions. There is nothing to joke about this. At 13.34% distribution, do some math, and you will find that you recover the money in 62 months – only 5 years and 2 months. Whatever leftover is your free money. As long as you have the shares, you still keep getting the distributions even after these 5 years and 4 months. It is not like that I had to surrender a big chunk of cash to the state and even after 14 years of retirement, my payout remains only 7.2% with inflation adjustment. A poor investment on my part. This is not a joke, either. This money will stop after both my wife and I die. However, PIMCO's distributions will continue to the one who inherits the shares. This is not a joke, either.
Since I make this kind of money in our ROTH accounts, they are not taxable either, unlike my retirement annuity income from the state that is 100% taxable. Right there, I save more than 20%. This is not a joke, either.
I'm not sure why people always mention with CEFs that you got your money back in 6 yrs or whenever. Nothing special about CEFs.
PDI has returned about 2.4% avg for the last 5 yrs. That includes distributions. The reason the current distributions are at 13% is because the price has fallen so much. The distribution amount has not changed for a while. Maybe what you are saying is that PDI is a good investment now, which could well be.
Edit: To compare, VWEAX returned about 1.9% avg over 5 yrs.
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Post by archer on Nov 2, 2022 4:56:08 GMT
The rule of 72 is used to approximate how long it takes your investment to double. If you invested $10K in PDI 5 years ago, and reinvested divs, you made about $700, not $10K. If you took the income, the result isn't much different due to the price erosion.
I'm not saying PDI and other income funds haven't provided nice income streams, but I will say that over the past 5 years, SPY and many other index funds have also provided just as well, or printed just as much money, and have more to spare. Both have declined this year, and I am sure both will rebound when market conditions improve. I'm just not seeing the magic that others seem to see at work here.
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Post by Deleted on Nov 2, 2022 5:49:24 GMT
archer and others .... sorry you had to take time for a poster who, while seemingly well-intentioned and a nice guy at heart, appears in too many posts to have too much mis-information, mis-understanding, off-thread material, and time for typing. Hopefully not too many CEF newbies have been led too far astray. As to the OP, my target yield is 8+% and is being met. For details, see my post in the recent CEF-holdings thread in the CEF section of this forum. In general, I am now focused on assured more-than-sufficient monthly income via leveraged CEF's. I'm looking ahead, not behind, and at this late stage in my life I (remembering well the 70's) do not want in the next few years to find myself dependent on what may be no/little equity cap-gains and thus find myself eating my seed corn. note: the yield of interest here is that of your income for your cost. Today's yield of 13% on a share is likely meaningless today or in the future on your shares purchased earlier. --- Frank
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Post by mnfish on Nov 2, 2022 10:37:29 GMT
Here are the top 20 investors in PDI, some with billions in stake. I am not smarter than these big banks. Of course, they must know something about the CEFs. I can cite more examples. Enough for now.
@ece Prof - You realize that Morgan Stanley, #1 on your list, has only $165 million (not billions) invested in PDI. Morgan Stanley has $1.4 Trillion in AUM. So, .000117857143 % of assets. Morgan Stanley holds 120,385,962sh of AMZN as of Jun 29, 2022 or $11,652,157,372 (that's billion) |
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Post by fishingrod on Nov 2, 2022 11:10:06 GMT
Here are the top 20 investors in PDI, some with billions in stake. I am not smarter than these big banks. Of course, they must know something about the CEFs. I can cite more examples. Enough for now.
@ece Prof - You realize that Morgan Stanley, #1 on your list, has only $165 million (not billions) invested in PDI. Morgan Stanley has $1.4 Trillion in AUM. So, .000117857143 % of assets. Morgan Stanley holds 120,385,962sh of AMZN as of Jun 29, 2022 or $11,652,157,372 (that's billion)
It is so easy to get millions and billions mixed up. I do it every time I look at my brokerage statement.
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Post by FD1000 on Nov 2, 2022 13:05:42 GMT
Sara : You take more risk - you get more return. FD: I proved so many times the above isn't true. One example: PRWCX vs SPY ( chart). There are many more that I held over the years such as PIMIX,FAIRX,SGIIX. Good trading is another one ===== Sara: Total return - well that can go wrong if you have to draw down too much FD: TR never goes wrong because it's TOTAL RETURN which includes everything. There is no magic, no matter how high is the dist, TR is the only number that matters. ===== R48: Well, FD, I have $25 to bet that in the next five years, starting tomorrow, PDI will beat SPY(proxy for S&P500), total return, in the next five years. FD: I posted SCHD vs SPY. Please pay attention. ===== Sara: I think that might be a liability issue (with CEF) FD: not really, they are just a black box and why you need to be careful. There are things that require special signature, trading CEFs are not. ===== Sara: How one chooses to proportion the risk/reward ratio is up to them, as is how to get the yield they need. FD: that's correct, but they also have to know basic math. PDI lost close to 16% in 3 years and made about 11.6% in 5 years. SPY made 33% + 62.7. CEFs holders can't admit this easy fact. ===== R48: You can add bond managers such as Gundlach, Bill Gross and Dan Ivacsyn (sp?) have filed, their making large investments in leveraged FI CEFs. Prof:You are right. They do it for me also, when I invest with them. My experience in the 5-years has shown that. So, they have earned my trust because they came through tough days during the pandemic for me. But, I am not smarter than Dan (Ivascyn) or Al Murata. They are doing their job, and I am simply minting the cash. FD: these managers know a lot more than I do BUT, I the numbers don't show it. Wait, they got thru the pandemic? PDI lost more than SPY, and the rebound was a lot less. These are 2 knockout, higher volatility + lower performance. If Dan (Ivascyn) or Al Murata are so smart, why didn't they save PDI and your money? It's pretty easy to play short or raise cash, but they didn't. Guess who sold eveything? ===== Prof: At 13.34% distribution, do some math, and you will find that you recover the money in 62 months – only 5 years and 2 months FD: you are seriously confused. In 5 years, PDI made less than 12%. Dist is only one part of TR. They basically gave you your money back. ===== hubsui:The reason the current distributions are at 13% is because the price has fallen so much. The distribution amount has not changed for a while. Maybe what you are saying is that PDI is a good investment now, which could well be. FD: correct. If the price drops another 20%, then the yield would go up. I do sometimes invest in black boxes, but my finger is on the trigger ready to sell. ===== mnfish: @ece Prof - You realize that Morgan Stanley, #1 on your list, has only $165 million (not billions) invested in PDI. Morgan Stanley has $1.4 Trillion in AUM. So, .000117857143 % of assets. FD: correct !!! See below 3+5 year performance of PDI vs SPY Attachments:
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Post by Deleted on Nov 2, 2022 13:30:37 GMT
Sara : You take more risk - you get more return.
FD: I proved so many times the above isn't true. One example: PRWCX vs SPY (chart). There are many more that I held over the years such as PIMIX,FAIRX,SGIIX. Good trading is another one
=====
Sara: Total return - well that can go wrong if you have to draw down too much
FD: TR never goes wrong because it's TOTAL RETURN which includes everything. There is no magic, no matter how high is the dist, TR is the only number that matters.
Publish a peer reviewed paper on your proof and then let's talk.
How you take return - distributions versus cap gains/losses can indeed matter and can indeed go wrong for a retiree - aka sequence of returns risk.
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Post by ECE Prof on Nov 2, 2022 14:10:01 GMT
FD Your charts make sense only for a trader, and not a person like me or steelpony10 . Besides, who said that I bought these shares on the specific day of your chart? In fact, I want to add one more point to the previous post. If I transfer these shares to my granddaughters, they can pay for their colleges without any handout from the government.
They are too young now, and I can wait for a decade more. By the time, my shares might have quadrupled in the future. Probably, they may have never to work for a living.
Add/Edit: If I have a choice of the Universities for them to attend, I would prefer to send them to IIT, Chennai (my Alma Matter) than sending them to MIT or Sanford in this country or McGill in CA. Modi has opened up the Institutes of Higher learning to foreign students, up to 25% of the class strength.
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Post by Deleted on Nov 2, 2022 18:10:41 GMT
I think everybody here understands total return. What I have a problem with is any investment product described like it's a kind of Magic Bean.
Most of us retirees and near retirees are trying to create an income stream. I'm early in retirement and still looking for some capital appreciation so dividend ETFs seem appropriate for my goals. In 10 more years, maybe I'll feel differently.
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Post by Deleted on Nov 2, 2022 18:13:57 GMT
Sara : You take more risk - you get more return. FD: I proved so many times the above isn't true. One example: PRWCX vs SPY (chart). There are many more that I held over the years such as PIMIX,FAIRX,SGIIX. Good trading is another one ===== Sara: Total return - well that can go wrong if you have to draw down too much FD: TR never goes wrong because it's TOTAL RETURN which includes everything. There is no magic, no matter how high is the dist, TR is the only number that matters. Publish a peer reviewed paper on your proof and then let's talk. How you take return - distributions versus cap gains/losses can indeed matter and can indeed go wrong for a retiree - aka sequence of returns risk. You take more risk you get more returns. The word "get" is problematic. More risk means by definition higher probability of loss too. ( I am not taking some academics definition of risk =volatility here which is in itself widely disputed.) |
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Post by Deleted on Nov 2, 2022 18:24:44 GMT
To think of it when one is younger volatility is less of an issue. As I am getting closer to retirement I am thinking of reducing volatility of my portfolio in my retirement.
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Post by ECE Prof on Nov 2, 2022 18:51:57 GMT
To think of it when one is younger volatility is less of an issue. As I am getting closer to retirement I am thinking of reducing volatility of my portfolio in my retirement. Volatility of a portfolio and income are two different aspects. Portfolio goes up and down. My portfolio is down by 20%, but my investment income has almost doubled this year. I have more cash that pays 3% where the equity was only paying 0.7%-1.2% before. Besides, the distributions from the CEFs have been very stable, and I have bought additional shares at cheaper prices.
Do you need a good income during the retirement? The TIAA guys are very happy now because TIAA increased the payout substantially to boost their income this year, and probably, they would increase it next year also. But, they have surrendered their cash just like I did, but I got only 3% increase in my state retirement (state law). Remember that I had a larger payout before this year. So, even income can vary according to what kind of arrangements you have made for your retirement. |
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Post by FD1000 on Nov 2, 2022 20:17:48 GMT
Sara : You take more risk - you get more return. FD: I proved so many times the above isn't true. One example: PRWCX vs SPY (chart). There are many more that I held over the years such as PIMIX,FAIRX,SGIIX. Good trading is another one ===== Sara: Total return - well that can go wrong if you have to draw down too much FD: TR never goes wrong because it's TOTAL RETURN which includes everything. There is no magic, no matter how high is the dist, TR is the only number that matters. Publish a peer reviewed paper on your proof and then let's talk. How you take return - distributions versus cap gains/losses can indeed matter and can indeed go wrong for a retiree - aka sequence of returns risk. I don't need a paper. You are looking at typical categories, I look and invest in managed funds. I gave you one example and can give you more. 1) PRWCX vs VFINX ( link). PRWCX made more money + loser SD = better Sharp 2) OAKBX+SGIIX vs VFINX during 2000-2010 ( link). Both made 10-12% annually, while the SP500 lost 1% annually with higher volatility. 3) VFINX + BND (50/50) vs PIMIX 100%) (link) during 2010-2018. PIMIX 100% bonds beat 50/50 for performance + lower SD. |
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Post by FD1000 on Nov 2, 2022 20:27:13 GMT
FD Your charts make sense only for a trader, and not a person like me or steelpony10 . Besides, who said that I bought these shares on the specific day of your chart? In fact, I want to add one more point to the previous post. If I transfer these shares to my granddaughters, they can pay for their colleges without any handout from the government.
They are too young now, and I can wait for a decade more. By the time, my shares might have quadrupled in the future. Probably, they may have never to work for a living.
Add/Edit: If I have a choice of the Universities for them to attend, I would prefer to send them to IIT, Chennai (my Alma Matter) than sending them to MIT or Sanford in this country or McGill in CA. Modi has opened up the Institutes of Higher learning to foreign students, up to 25% of the class strength.
Most hold SP500 for life, what trading are you talking about. Again, your specific situation is just yours, I'm discussing generic ideas. The number of shares means NOTHING. Only TR and the amount of money means everything. Someone who held SPY for 5 years have a lot more money than PDI. If you invested one million in each SPY,PDI you have 1.62+ million in SPY now and only 1.11 in PDI. The number of shares is irrelevant. Why are you posting about university, Modi, India? |
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Post by Deleted on Nov 2, 2022 20:43:34 GMT
Sara : You take more risk - you get more return. FD: I proved so many times the above isn't true. One example: PRWCX vs SPY (chart). There are many more that I held over the years such as PIMIX,FAIRX,SGIIX. Good trading is another one ===== Sara: Total return - well that can go wrong if you have to draw down too much FD: TR never goes wrong because it's TOTAL RETURN which includes everything. There is no magic, no matter how high is the dist, TR is the only number that matters. Publish a peer reviewed paper on your proof and then let's talk. How you take return - distributions versus cap gains/losses can indeed matter and can indeed go wrong for a retiree - aka sequence of returns risk. I don't need a paper. You are looking at typical categories, I look and invest in managed funds. I gave you one example and can give you more. 1) PRWCX vs VFINX ( link). PRWCX made more money + loser SD = better Sharp 2) OAKBX+SGIIX vs VFINX during 2000-2010 ( link). Both made 10-12% annually, while the SP500 lost 1% annually with higher volatility. 3) VFINX + BND (50/50) vs PIMIX 100%) (link) during 2010-2018. PIMIX 100% bonds beat 50/50 for performance + lower SD. Did you predict any of that before it happened? If you did, what is your prediction for the best investment for the next 10 years? Let's get it on the record. |
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Post by FD1000 on Nov 2, 2022 21:00:05 GMT
I don't need a paper. You are looking at typical categories, I look and invest in managed funds. I gave you one example and can give you more. 1) PRWCX vs VFINX ( link). PRWCX made more money + loser SD = better Sharp 2) OAKBX+SGIIX vs VFINX during 2000-2010 ( link). Both made 10-12% annually, while the SP500 lost 1% annually with higher volatility. 3) VFINX + BND (50/50) vs PIMIX 100%) (link) during 2010-2018. PIMIX 100% bonds beat 50/50 for performance + lower SD. Did you predict any of that before it happened? If you did, what is your prediction for the best investment for the next 10 years? Let's get it on the record. I don't predict, I follow markets and why I owned all the funds above, but nice try. I'm in cash very early in 2022 and positive every day in YTD. Also posted in 01/2022 that value is better than growth  Below one more. SC + EM vs SPY since 2010( link). EM is a great example of how risk results in very low performance. |
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Post by meature on Nov 26, 2022 18:02:08 GMT
@r48
Let me offer a correction.
None with billions, not even close.
Market cap is 4.4B
oops I see others had commented on this
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Post by FD1000 on Nov 27, 2022 5:09:07 GMT
Yep. I live of about 3-3.25% withdrawal of PV. I'm 64 (retired 11 years ago).
According to my xls (every problem can be solved with a new spreadsheet), if I make 2% real return, there will be plenty left over (I run the xls until I'm 101).. Love my spreadsheets. We retired about the same age. But probably one major economic cycle before you. :-) At 6.28 - 6.50% and SS, there is plenty left over, except maybe less left over when I enter "the home". I remember relatives going in when it cost $3000 per month; now $12,000 per month. :-) This year, I had very low income because I traded 3 times and the rest came from MM. I have a huge left over. I never used spreadsheet for my investments. I know the size of my portfolio and how much we need to cover our expenses. A retiree with at least 25 times annual expense, not including SS, will do pretty well. Hint: in the last 5 years it grew a lot more.  |
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