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Post by chang on Jan 25, 2021 15:15:48 GMT
I am thinking that ST / UST / cash / whatever can also serve as "ballast", without dropping in value as much as IT.
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Post by chang on Jan 25, 2021 15:26:07 GMT
If some of the Covid-19 variants prove resilient to the vaccines, things could get tricky. T-Bonds would soar if this happens. They zag when stocks zig. And I do think they could zig. The UK variant is especially transmittable in the air. The UK now has the planet's highest covid-19 death rate. Vaccinations are taking far too long. Moderna says that the South Africa variant is even more challenging and doubts the longevity of their vaccine's protective ability. They're working on a booster, but given the time required to deliver, I think we have a problem. Sorry to sound alarmist ... If things go really go south on the Covid front, I will need something better than a minor holding in VBILX to protect my portfolio. It seems to me that building up some cash isn't the worst thing to do now.
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Post by racqueteer on Jan 25, 2021 15:29:21 GMT
If some of the Covid-19 variants prove resilient to the vaccines, things could get tricky. T-Bonds would soar if this happens. They zag when stocks zig. And I do think they could zig. The UK variant is especially transmittable in the air. The UK now has the planet's highest covid-19 death rate. Vaccinations are taking far too long. Moderna says that the South Africa variant is even more challenging and doubts the longevity of their vaccine's protective ability. They're working on a booster, but given the time required to deliver, I think we have a problem. Sorry to sound alarmist ... As kind of a public service, I'm going to mention something which is being explored as an alternative to the vaccine (for whatever reason one might have). There is a treatment/prophylaxis involving IVERMECTIN. Lots of information available, and a number of highly-respected doctors are onboard (apparently). Here is one site: www.thelancet.com/journals/eclinm/article/PIIS2589-5370(20)30464-8/fulltext (not sure how to effect a link; sorry).
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Post by Chahta on Jan 25, 2021 15:41:31 GMT
Looks like that is treatment not prevention.
May be a good day to sell IT. TNX yield is tanking.
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Post by Norbert on Jan 25, 2021 16:01:52 GMT
If some of the Covid-19 variants prove resilient to the vaccines, things could get tricky. T-Bonds would soar if this happens. They zag when stocks zig. And I do think they could zig. The UK variant is especially transmittable in the air. The UK now has the planet's highest covid-19 death rate. Vaccinations are taking far too long. Moderna says that the South Africa variant is even more challenging and doubts the longevity of their vaccine's protective ability. They're working on a booster, but given the time required to deliver, I think we have a problem. Sorry to sound alarmist ... If things go really go south on the Covid front, I will need something better than a minor holding in VBILX to protect my portfolio. It seems to me that building up some cash isn't the worst thing to do now. That's what I'm doing. Ben Gurion was closed yesterday in response to the Covid-19 variants. I've written off my planned March visit. Epidemiologists are not confident that the vaccines can deal with the mutations. We may be seeing lockdowns continue far longer than anticipated. That's not priced into the market, IMHO. Vaccine production needs to be scaled up by a factor of 10, with the ability to rapidly manufacture and distribute boosters. I get the feeling that we're sleepwalking our way through this crisis.
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Post by Norbert on Jan 25, 2021 16:13:51 GMT
If some of the Covid-19 variants prove resilient to the vaccines, things could get tricky. T-Bonds would soar if this happens. They zag when stocks zig. And I do think they could zig. The UK variant is especially transmittable in the air. The UK now has the planet's highest covid-19 death rate. Vaccinations are taking far too long. Moderna says that the South Africa variant is even more challenging and doubts the longevity of their vaccine's protective ability. They're working on a booster, but given the time required to deliver, I think we have a problem. Sorry to sound alarmist ... As kind of a public service, I'm going to mention something which is being explored as an alternative to the vaccine (for whatever reason one might have). There is a treatment/prophylaxis involving IVERMECTIN. Lots of information available, and a number of highly-respected doctors are onboard (apparently). Here is one site: www.thelancet.com/journals/eclinm/article/PIIS2589-5370(20)30464-8/fulltext (not sure how to effect a link; sorry). There's more information available here: www.sciencedirect.com/science/article/pii/S0166354220302011It's an anti-parasitic agent that's very effective against Covid-19 in vitro. And it's widely available. Yes, it's a treatment, not a vaccine. N.
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Post by Chahta on Jan 25, 2021 16:15:49 GMT
If everyone was to be vaccinated in the world that is equivalent to 25 USAs. That is a massive undertaking. Some vaccines came fast and others are taking more time. We will need them long term anyway. Locally 65+ vaccinations were changed from Feb-Mar to March. Part of the reason is politicians getting involved. 80% of Covid deaths are 65 and up. Being a male makes it worse. They should concentrate on 65+ without politics.
What is priced into the markets is the crazy high earnings being reported. I posted that elsewhere. Doesn't earnings drive the market?
Since this thread is about where to go with low yields, how do you all view HY muni? I own muni core plus in taxable but recently started a HY muni position in my IRA. It has very low correlation to equities. I am late to the game since I have never owned a real HY corp. or muni fund. I do have a high stake in ST/UST like 21%. Too much?
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Post by xray on Jan 25, 2021 16:49:55 GMT
Yields [IMHO] are not low but rather high in a market which many of us consider over-valued....
Some of the better yield paying securities have started to rise as income investors become aware of them. I posted two of them on the "CEF" board [closed-end boards] that have been giving us both excessive dividends ["BOTH" div's were just raised +20% recently for the remainder of the year] + CapGains....
There is "GOLD" in them hills, we just have to pan for it ....
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Post by Karen on Jan 25, 2021 16:58:58 GMT
Is VBILX doing this to me personally? I swear it's actually pissed off at me for what I said, and dropping 0.25-0.50% every day just to get back at me. (FXNAX also, to a lesser extent.) OK then, VBILX, are you listening? I'm giving you until next Wednesday to shape up or I'm going to kick you out of my portfolio so hard you won't bounce twice before you land in the street. VBILX is having another crappy month. What do you guys think? I'm still well in the green with this fund, given its super 2020 performance, but I see no reason to stay on a sinking ship. It's still hanging on to a 5* rating, but that won't last long. Is it time to get the hell out of I/T US Treasuries which comprise 54% of this fund? Logic: rates may or may not be going up, but they sure ain't going down. How much is this fund paying me to take interest rate risk? Virtually nothing. So what does it offer? Basically Black Swan protection like it delivered in 2020. But is it the best vehicle for that? Probably not. So why own it? I think I'd be better off dumping it all into gold. Edit: Decided. Order placed to dump all remaining shares into VUSFX. changIn this category we sold BAGIX at the end of 2020, sold VBILX at the beginning of January, and are holding onto FBNDX which we think is the best in this category. Our two sales were prompted by my husband who believed that an interest rate move/s was coming sometime soon and his expectations that it would hurt this category pretty bad. He thinks you are probably wise to reduce your holdings in this category and today looks to him to a good day to do it. Best wishes and Thank You again for this site. It is really helping us.
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Post by nromsted on Jan 26, 2021 1:03:33 GMT
Chahta asks about our opinions of HY munis. I've owned VWALX a few years back and was very pleased. I'm sure it has continued to do great. And congrats to all who have taken positions in HY munis.
I moved out because I was working on reorganizing my portfolio to put income earners into the tax deferred portfolio and more equities into the taxable portfolio. Besides my single-state position in VA munis (thru USVAX), I now have a substantial portion of national munis held within VTMFX. A little less than half of my bond portfolio is now held in munis.
The problem with HY munis is your confidence that the states/cities/entities will be good on the debt. You should look at who are the borrowers within your muni funds. That's no different than any HY corp fund. The new administration and Congress is predicted to show a greater willingness to bail out the otherwise insolvent borrowers. So your security is greater, and you should be relieved.
Also, I have notice a continuing trend in the muni space for borrowers to offer Variable Rate Demand Notes to buyers of munis. These are offered thru banks who package them as rate-dependant on market conditions. Although listed as long maturity, they are rate-adjusted each month or shorter, resulting in a very low duration.
So in general I think that HY munis are a great place to be right now. I think you should continue to watch them as the situation of the borrowers and the federal government evolves.
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Post by steadyeddy on Jan 26, 2021 13:24:01 GMT
If some of the Covid-19 variants prove resilient to the vaccines, things could get tricky. T-Bonds would soar if this happens. They zag when stocks zig. And I do think they could zig. The UK variant is especially transmittable in the air. The UK now has the planet's highest covid-19 death rate. Vaccinations are taking far too long. Moderna says that the South Africa variant is even more challenging and doubts the longevity of their vaccine's protective ability. They're working on a booster, but given the time required to deliver, I think we have a problem. Sorry to sound alarmist ... I feel the same way Norbert. I feel that the COVID recovery path is over-estimated and simplified across the globe. Even in the US, the process to deliver vaccines is ridiculously bad. Having said that, if the market turns sharply lower we have a superwoman/superman team (Yellen/Powell) who will come to the rescue and print even more money. Also, if markets turn sharply down again, we will see negative interest rates in the US. Superman would not be able to stop it.
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Post by Chahta on Jan 26, 2021 13:26:43 GMT
Moderna said yesterday that their vaccine works against the variants so far.
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Post by Norbert on Jan 26, 2021 13:33:12 GMT
Moderna said yesterday that their vaccine works against the variants so far. I think Moderna did comment that the South Africa variant may be a problem in terms of the existing vaccine providing longer term protection. So, they are working on a booster to provide supplemental immunity. Apparently the variants are extremely contagious in the air, and are more deadly. My concern is the time required to reengineer and deliver the vaccines and any boosters. The EU has only vaccinated about 2% of the population at this point. Not encouraging.
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Post by Chahta on Jan 26, 2021 17:17:32 GMT
If some of the Covid-19 variants prove resilient to the vaccines, things could get tricky. T-Bonds would soar if this happens. They zag when stocks zig. And I do think they could zig. The UK variant is especially transmittable in the air. The UK now has the planet's highest covid-19 death rate. Vaccinations are taking far too long. Moderna says that the South Africa variant is even more challenging and doubts the longevity of their vaccine's protective ability. They're working on a booster, but given the time required to deliver, I think we have a problem. Sorry to sound alarmist ... I feel the same way Norbert. I feel that the COVID recovery path is over-estimated and simplified across the globe. Even in the US, the process to deliver vaccines is ridiculously bad. Having said that, if the market turns sharply lower we have a superwoman/superman team (Yellen/Powell) who will come to the rescue and print even more money. Also, if markets turn sharply down again, we will see negative interest rates in the US. Superman would not be able to stop it. What should the process be? One long line 1000 miles long? No vaccine has happened this fast before. Other than politicians getting involved in who should get it first etc. it is happening quickly. The recovery path has been stated by the new administration as "herd immunity by this summer". Who believes that?
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Post by fred495 on Jan 26, 2021 17:21:53 GMT
Norbert said: "I think Moderna did comment that the South Africa variant may be a problem in terms of the existing vaccine providing longer term protection. So, they are working on a booster to provide supplemental immunity.
Apparently the variants are extremely contagious in the air, and are more deadly.
My concern is the time required to reengineer and deliver the vaccines and any boosters."
The NY Times reported yesterday that Dr. Ugur Sahin, the chief executive of Germany's BioNTech research laboratory that developed the mRNA vaccine that is being distributed by Pfizer, said "that his company was talking to regulators around the world about what types of clinical trials and safety reviews would be required to authorize a new version of the Pfizer-BioNTech vaccine that would be better able to head off the variant in South Africa.
Studies showing decreased levels of antibodies against a new variant do not mean a vaccine is proportionately less effective, Dr. Sahin said.
BioNTech could develop a newly adjusted vaccine against the variants in about six weeks, he said. The Food and Drug Administration has not commented on what its policy will be for authorizing vaccines that have been updated to work better against new variants.
But some scientists said that the adjusted vaccines should not have to go through the same level of scrutiny, including extensive clinical trials, that the original versions did. The influenza vaccine is updated each year to account for new strains without an extensive approval process."
Apparently, the problem will not be in developing "a newly adjusted vaccine against the variants", but in the logistics of getting it into the arms of people.
Fred
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Post by anitya on Jan 26, 2021 17:38:05 GMT
Commentary from the IMF on current status and revision to their economic projections. youtu.be/46k-kaSgn2I
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Post by Chahta on Jan 26, 2021 18:10:26 GMT
I saw and heard the French CEO of Moderna say their vax will work with the known variants yesterday on Yahoo News channel. I think Bancel is his name. Don’t shoot the messenger. 😊
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Post by anitya on Jan 26, 2021 19:48:02 GMT
As of a week ago, Israel has vaccinated (1st dose) 25% of its population, with 5.5% receiving two doses. I am guessing that 25% is probably now 30+%. I do not think small population size (10M) should be an excuse for us not to be able to re-examine, learn, and improve.
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Post by FD1000 on Jan 26, 2021 20:11:08 GMT
As of a week ago, Israel has vaccinated (1st dose) 25% of its population, with 5.5% receiving two doses. I am guessing that 25% is probably now 30+%. I do not think small population size (10M) should be an excuse for us not to be able to re-examine, learn, and improve. +1 and what I have said at other places. It's not the first time and in other categories. The US Gov always spend a lot more money per capita money than other countries while the results get worse, think healthcare and education. It's always the same sad story, too many Gov/State employees and overlapping processes between Federal, State, counties and cities. Can someone explain to me why in GA we have city police, county police, state police while in Israel there is only one, Israel police. Why GA has 159 counties each with its own employees, really? My son's car was stolen in one city, the drunken robber crashed it in another city, and they towed it to a third city all within 10 miles. It took a week running thru 3 cities to figured it out, I had a brain explosion.
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Post by anitya on Jan 26, 2021 20:46:14 GMT
With all the talk about rising yields and an aversion to fixed income in this thread, I compared VWINX and VFINX from Jan 1, 1977 (first full calendar year for VFINX) thru Dec 31, 1983 (7 yrs). The TR is about the same with lower volatility for VWINX, which is fixed income heavy. VWELX TR was better than the other two with volatility falling in between the other two.
My comparing an active fund with a passive index is not scientific. May be somebody could help.
If somebody has total return info from 1968-83 for the following four, they could re-run the comparisons and at different fixed income weightings:
Active fixed income fund
Passive fixed income fund
Active large cap blend fund
S&P 500.
I do not see holding large chunks of gold and commodities' wrappers realistic for most DIY investors, even if they turn out to be the best components of portfolio optimization. So, I am inclined to test only fixed income and equities.
P.S.: I have a limited quota for daily social media posting. Pl do not be offended if I do not reply often.
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