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Post by win1177 on May 2, 2023 15:51:27 GMT
Hey everybody,
Have a relatively low percentage in bonds (funds) right now, vast majority of fixed income money is in brokerage money market accounts. Still hold a lot of equity, about 85% of portfolio. Hold about 3% in bonds, rest (12%) in money markets. But have been slowly adding to bonds, mainly int. Muni funds and safer high yield muni funds.
In view of debt ceiling issues, as well as Fed “possibly pausing” rate hikes soon, anybody else adding to bonds? Yes or no? And why?
Win
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Post by Chahta on May 2, 2023 15:53:28 GMT
I am at full bond AA except in my taxable account. I withdrew muni fund assets and put them into MM a couple of months ago. I really want to get to the point I just buy/sell to rebalance.
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Post by johnsmith on May 2, 2023 17:00:02 GMT
Hey everybody, Have a relatively low percentage in bonds (funds) right now, vast majority of fixed income money is in brokerage money market accounts. Still hold a lot of equity, about 85% of portfolio. Hold about 3% in bonds, rest (12%) in money markets. But have been slowly adding to bonds, mainly int. Muni funds and safer high yield muni funds. In view of debt ceiling issues, as well as Fed “possibly pausing” rate hikes soon, anybody else adding to bonds? Yes or no? And why? Win yes.
Buying Duration (Long & Intermediate term)
Why? - short term interest rates can't go up much higher, we "know" .25%; max probably another .75% if that. Everywhere banks are failing. Money is becoming tight. Tech industry is laying off like no tomorrow.
So chances of higher rates are low. Therefore the reward in cash or other places is lower.
Chances of lower rates are higher, especially if the FED has to do something to "fix" the economy. If it doesn't have to fix and keeps the rates on hold, we still keep getting 3.5 - 4% interest on these intermediate / long term bonds.
If the rates go lower, then some capital gains too.
It's not a bad time for bonds with decent credit risk. Bad credit risk is probably a bad idea now / early (High Yield aka Junk).
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Post by FD1000 on May 2, 2023 17:03:00 GMT
"Easy" choice for me. I follow my T/A + More. 3 break line is pretty good indicator anyway. So far YTD, I had 2 trades, first buy in early January, second buy in early March. schrts.co/DVpcweVQ |
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Post by steelpony10 on May 2, 2023 17:24:22 GMT
We haven’t spent down yet. The reason for that is adding incremental amounts to income investments each month sourced from the last months unused income. Compounding at higher rates then our current personal inflation moves spend down further into the future. Investing during crises provides even greater opportunities to do that.
Too much concentration on the short term which is the biggest unknown of all as well as a cousin of market timing. All this will be resolved some day and we’ll all move on to the next crisis. The greatest risk is missed opportunity risk.
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Post by steadyeddy on May 2, 2023 22:42:50 GMT
Yes adding to long bonds which offer capital appreciation opportunity as well.
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Post by FD1000 on May 2, 2023 22:52:22 GMT
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Post by Fearchar on May 3, 2023 7:45:03 GMT
Have not been adding to bonds since I consider 3 month T Bills to be equivalent to cash. Holding just over 61% cash and equivalents in my own accounts.
Only Bond fund i own is PIMIX which is 9.3% of Port and holding up well. It is yielding more than cash. Will need to consider this more, but PIMIX with its management is probably better able to navigate the future than I.
I could trim a little bit more equity, but not much.
There are so many choices within the world of Bonds.
Curious to see if this board could reach a consensus on bonds.
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Post by chang on May 3, 2023 7:53:53 GMT
I don’t think I’ve bought or sold a dollar of anything in at least six months. Fortunately I got my portfolio into an “autopilot” position I was happy with, and that’s how it’s staying. I have a large 6M T-bill expiring in June, and as far as I can see I will probably buy another.
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Post by Fearchar on May 3, 2023 7:58:58 GMT
BTW, Blackrock is recommending only very short term high quality bonds for income and emerging market debt in local currency bonds for income.
I believe typical retail investor will be hard pressed to invest in EM debt in local currency.
One may argue that 3 month T Bills are bonds. Yield drops off so fast with duration right now that it seems risky to go much over 1 year duration.
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Post by steadyeddy on May 3, 2023 11:43:16 GMT
BTW, Blackrock is recommending only very short term high quality bonds for income and emerging market debt in local currency bonds for income. I believe typical retail investor will be hard pressed to invest in EM debt in local currency. One may argue that 3 month T Bills are bonds. Yield drops off so fast with duration right now that it seems risky to go much over 1 year duration. , EMLC is an ETF from Van Eck that invests in local currency EM bonds. 30bps expense ratio with almost 7% 30-day yield. T-bills are more cash equivalents than bonds in my opinion since they don't provide duration lift to capital appreciation when interest rates drop. |
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Post by steadyeddy on May 3, 2023 11:46:46 GMT
I don’t think I’ve bought or sold a dollar of anything in at least six months. Fortunately I got my portfolio into an “autopilot” position I was happy with, and that’s how it’s staying. I have a large 6M T-bill expiring in June, and as far as I can see I will probably buy another. , sometimes keeping your fingers away from the trigger button in itself is a good thing! Great Job in your disciplined approach!! |
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Post by johnsmith on May 3, 2023 13:53:15 GMT
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Post by retera on May 3, 2023 18:47:11 GMT
Yes, I am adding to my bonds due to the current debt ceiling issues and the possibility of the Federal Reserve pausing rate hikes. Bonds offer a more secure investment option in times of uncertainty, such as these. By diversifying my investments with bonds, I am able to reduce my risk and ensure that I have a secure source of income. App development cost can vary greatly depending on the type of app, the platforms it will be developed for, the features that are required, and the technology used. For instance, a basic app with minimal features may cost around $5,000, while a complex app with many features could cost upwards of $100,000. |
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Post by steadyeddy on May 3, 2023 19:50:39 GMT
Yes, I am adding to my bonds due to the current debt ceiling issues and the possibility of the Federal Reserve pausing rate hikes. Bonds offer a more secure investment option in times of uncertainty, such as these. By diversifying my investments with bonds, I am able to reduce my risk and ensure that I have a secure source of income. , Welcome to the forum! What type/wrappers of bonds are you adding to? Thanks. |
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Post by retiredat48 on May 4, 2023 1:40:03 GMT
Hey everybody, Have a relatively low percentage in bonds (funds) right now, vast majority of fixed income money is in brokerage money market accounts. .... Win ,...to be clear folks, money market funds are either corporate bonds or treasury notes/bonds. But you own "bonds". R48 |
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Post by Fearchar on May 6, 2023 0:32:05 GMT
Thank-you steadyeddy, Now that I have some spare time, I took a closer look at EMLC (VanEck Emerging Markets Local Currency ETF). There just so happens to be an article on Seeking Alpha on this ETF. That author notes the relatively high correlation between EMLC and JNK:  The author notes that this suggest that the macro drivers behind EMLC's returns are similar to high yield bonds. That is economic conditions and credit spreads more so than interest rates (treasuries). So, if the US economy were to slow down, then so would EMLC. The seeking author mentions strength or weakness of the U.S. dollar, but suggests this is secondary. More over with short-term yields at 5%, the advantage of EMLC is not that attractive. Will mull it over some, but very likely I'll be in line for Monday's Treasury auction. |
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Post by steadyeddy on May 6, 2023 3:11:00 GMT
Thank-you steadyeddy , Now that I have some spare time, I took a closer look at EMLC (VanEck Emerging Markets Local Currency ETF). There just so happens to be an article on Seeking Alpha on this ETF. That author notes the relatively high correlation between EMLC and JNK: View AttachmentThe author notes that this suggest that the macro drivers behind EMLC's returns are similar to high yield bonds. That is economic conditions and credit spreads more so than interest rates (treasuries). So, if the US economy were to slow down, then so would EMLC. The seeking author mentions strength or weakness of the U.S. dollar, but suggests this is secondary. More over with short-term yields at 5%, the advantage of EMLC is not that attractive. Will mull it over some, but very likely I'll be in line for Monday's Treasury auction. , I agree with your assessment. I used to own EMLC during the first half of 2022. As the market swoon took hold, I cleared my position. Fortunately it was in a taxable account and I booked tax loss. At the moment, PIMIX is the only holding I have that probably has some EM exposure. |
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Post by Chahta on May 9, 2023 14:02:18 GMT
Funds that have done well this year: PTIAX, OSTIX, CBLDX, RSIIX, DODIX, TSIIX.
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Post by catdog on May 9, 2023 19:42:37 GMT
Steady Eddy,
I used to own PONAX. The expense ratio was driving me crazy before they raised it, so I sold out. I see on yahoo finance that the er is listed as .51. Do you think that is correct?
Catdog
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Post by Capital on May 9, 2023 22:03:54 GMT
I bought T-bills yielding 5.2% today maturing 08/03/2023.
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Post by FD1000 on May 9, 2023 22:54:21 GMT
I'm in 99+% MM which pays 4.8 (for treasuries) and more. The bird in the hand is very easy to hold and wait for the next trade. HY munies ST+LT T/A signaled a buy, but it was too late, rates started going up, debt ceiling is troubling = wait and see. The only other good option is RPHIX which I posted about 6 months ago. See the chart below. schrts.co/AKACuyTK================ catdog, PONAX ER=0.91% Always look at the source. www.pimco.com/en-us/investments/mutual-funds/income-fund/a |
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Post by steadyeddy on May 10, 2023 0:04:36 GMT
Steady Eddy, I used to own PONAX. The expense ratio was driving me crazy before they raised it, so I sold out. I see on yahoo finance that the er is listed as .51. Do you think that is correct? Catdog , 0.51% is correct but for the Institutional class of PIMCO Income Fund PIMIX. It is available on Schwab for a transaction fee of $50. It is also available on e*Trade as NTF - no transaction fee fund. PONAX I believe is 0.91% er I use PIMIX on e*Trade platform, and PONAX on Fidelity platform where I have accounts. |
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Post by steadyeddy on May 10, 2023 0:11:28 GMT
Steady Eddy, I used to own PONAX. The expense ratio was driving me crazy before they raised it, so I sold out. I see on yahoo finance that the er is listed as .51. Do you think that is correct? Catdog , If you find a good fund that you like please do not focus too much on the expense ratio. PIMCO income fund uses everything under the sun as tools to manage the bonds they hold. With the AUM they have of nearly $130B, could they be cheaper? YES. But, if you buy PIMIX (say on e*Trade) you pay 0.51% which is right in the range of many active funds. And if you notice the last few weeks where bonds were swinging quite a bit up/down, PIMIX is steady. |
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Post by FD1000 on May 11, 2023 12:44:24 GMT
RPHIX was closed for years but its open now at Schwab, I did my usual, when I see a fund I like I buy a position in case I need it in the future. Min to buy was $1000. I bought in 4 accounts(I can transfer to the fifth one if I need), the fee is $49.95 but Schwab waived it for me.
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Post by FD1000 on May 11, 2023 19:29:47 GMT
MM is really going high
Schwab Value Advantage Money Fund® Ultra Shares (SNAXX) = 5.0257%
Schwab Treasury Obligations Money Fund™ Ultra Shares (SCOXX) = 4.9439%
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Post by anitya on May 11, 2023 22:13:20 GMT
RPHIX was closed for years but its open now at Schwab, I did my usual, when I see a fund I like I buy a position in case I need it in the future. Min to buy was $1000. I bought in 4 accounts(I can transfer to the fifth one if I need), the fee is $49.95 but Schwab waived it for me. Yes it is open at Schwab. The $1,000 min is in an IRA The min in a taxable account is $2500 |
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Post by catdog on May 11, 2023 23:23:46 GMT
Steadyeddy and FD,
Thanks for your answers and advise.
Steadyeddy I think I sold PONAX as the threat of rising interest rates were making me nervous, not just the rising ER. But, you are right, I should not judge a fund by an ER.
Active management in a bond fund is often considered better than index funds even though they cost more.
Is there a higher minimum for PIMIX?
Catdog
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Post by FD1000 on May 12, 2023 0:05:10 GMT
If it was me I would buy RCTIX instead of PIMIX. RCTIX has small AUM=0.5 billion, and much better risk reward = to better performance and volatility + income is matching. A chart is worth a 1000 words. schrts.co/GhshmzQYYTD chart is another proof, see how PIMIX goes down 4% while RCTIX has much lower volatility schrts.co/pdDUaxsJThis is not a recommendation, you got to do your own due diligence. As long as I can find one fund better than PIMIX, I would never invest in it. |
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Post by steadyeddy on May 12, 2023 1:36:05 GMT
Steadyeddy and FD, Thanks for your answers and advise. Steadyeddy I think I sold PONAX as the threat of rising interest rates were making me nervous, not just the rising ER. But, you are right, I should not judge a fund by an ER. Active management in a bond fund is often considered better than index funds even though they cost more. Is there a higher minimum for PIMIX? Catdog , PIMIX has no minimum on e*Trade and no transaction fee. |
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