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Post by yogibearbull on Feb 20, 2021 17:43:52 GMT
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Post by racqueteer on Feb 20, 2021 18:54:50 GMT
I am surprised that VWELX did not out do the others over such a long time period. we use VWINX ( Wellesley Income) as our ballast, not holding any other bonds. We don’t need bonds as we do own TIAA Traditional, which I think of as a stable value fund earning 4%. Stats I'm not sure that DODGX is the best comparison to make. I added VPCCX to the mix and started at its inception (02/28/2005). I think that more accurately depicts the increasing equity outcomes. D&C behaved poorly in 2008, and I think that skews things. In the original chart, I think the tailwinds for bonds (VWINX) partially compensated for the equity effect. That gets VWINX and VWELX closer than they may otherwise have been.
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Post by anitya on Feb 20, 2021 19:03:22 GMT
Racq,
The topic is bonds, equities, & inflation (at least rising rates). I picked the dates as far back as I can go for rising rates. You can use an equity index, a HY index, and an AGG type index from late 60s to early 80s if you have data - I did not. I do not understand the relevance of 2005 and using a different active fund in your post.
Thanks.
A
Once you have the data, you can use portfolio visualizor and play with mixing the three and see what comes out.
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Post by yogibearbull on Feb 20, 2021 19:27:35 GMT
As for Wellington/ VWELX, the period included its terrible stretch when it tried to change its colors and the experience was so bad that Bogle got fired from Wellington Management and had to start over with Vanguard. DODBX is among the most aggressive of moderate-allocation funds [really, aggressive-allocation, IMO]. A more representative MA fund for the period is Puritan/ FPURX although it is also acting like aggressive-allocation lately. LINKLike tortoise in the classic The Tortoise and The Hare story, Wellesley/ VWINX gets there eventually.
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Post by anitya on Feb 20, 2021 19:59:28 GMT
My post last night was in response to the overwhelming angst in this thread.
There is no B&H definition made with any specificity you all will agree to, do not look for certainty, if you think somebody else has a better mousetrap copy it for sometime and see how that is working for you, just try to evolve in your thinking and doing until they plant you, and help others if you can. Most of you are doing more than fine. Enjoy.
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Post by retiredat48 on Feb 21, 2021 0:01:26 GMT
Why are not things like cash, money market funds and very short term bond funds, BALLAST?? Why rationalize some decline in NAVs due rates rising, for intermediate and LT bond funds...as ballast? Note: Guru Jeff Gundlach says (January) cash and short term is where to find "ballast" today...and expect to see the ten year with a 2 handle on rates. R48 R48 - The answer is simple (in my mind). Rising rates is a risk not a fact. The governments can NOT afford higher rates since they need to issue new bonds to replace maturing ones, and their cohorts (i.e., central banks) will indefinitely continue financial oppression. Note I said indefinitely. If folks are thinking the 80s style interest rates, foggetaboudit! Glad to engage in a debate. Let me turn the question around to you: Why do you think interest rates will continue to rise? Why do you think the central banks will allow that to happen? Regards. Steady...I didn't say interest rates/bond yields have to rise. Either way, bond holders have poor returns. If rates stay the same or go down (a very good possibility, and for years, like Japan), you suffer from low returns; if rates rise, you have NAV price falls counterbalancing any increase in yield. Personally, I think rates will remain low for years, while inflation rises...there's just so much bond money around. (Like, I never expected people would keep money in zirp mm funds, or 0.1% rate CDs, but they do. Yes, gvt will bail out companies, the gvt debt, and folks like you and me, on the backs of old people, poorer people with bank savings accts at 0%, and lethargic bond holders. Thus, I keep my eye on TLT LT Treasuries, as something I could buy/sell if I think rates will adjust lower for awhile. I have been avoiding TLT for some time now. R48
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Post by retiredat48 on Feb 21, 2021 0:10:54 GMT
Thus, I find that last year I have sold out of all such funds with intermediate or long term duration....notable example, BCOIX, which I held for decade plus. The fed has been supporting such bonds with QE buying...not sure when that ends; but it will not be good for bonds in the long run. My portfolio is now at highest cash position ever, mostly from the bond fund exit, into shorter term duration funds, including MM funds. Credit given where it's due: R48 and I communicated offline about bonds, and subsequently I sold all my BIV and VBILX. No regrets! However, I am still holding long-duration munis .... lots of them .... because the spreads/TEQ yields are attractive, and I think taxes are going up. (I also haven't sold IT funds DODIX and PIGIX.) Question to retiredat48 : I know you're a LT holder of Wellington. Are you still keeping that with its LT bonds? I posted last year that I sold some of my VWELX both to lighten the load, and to take some capital gains before the Biden Admin changed the rules. The gains are taxed at zero for me. I could always retake the position if desired. I kept some Wellington as a legacy in which I will NEVER sell. It is not a huge amount. I queried Vanguard on whether they know of any current holders who own it longer then me. They did not have an easy way to ascertain or answer that. If the IRS ever checks me for any cost basis initial buy dates, I will tell them the records are in upstate NY, and due Covid I can't retrieve them!! ...and in audits I will be "hard-of-hearing", with mental frailties, etc. R48
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Post by yogibearbull on Feb 21, 2021 0:57:02 GMT
IRS has a simple remedy when an investor claims that cost-basis cannot be found. It is assumed to be 0 and 100% of sales becomes taxable. That gives people huge incentive to find old records or come up with plausible estimates for cost basis.
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Post by retiredat48 on Feb 21, 2021 1:04:45 GMT
Ahhh, but there is a problem. The interest rate. Sure, you may not have bond price declines, but what is your return...poor...due low rates. Example...my 101 year old Mother in law is in CDs and short term treasuries. She complains she is earning no yield and has to pay her assisted living facility monthly fees, from principal. Yes, this is what is happening with bond holdings--being fleeced due low rates. Old-timers fear paying anything from principal...even though she has enough for twenty more years...but she is an optimist. You will not lose money; but you will likely lose to REAL returns...pricing power after inflation. Norbert has posted charts of bonds, 1966 to 1980, which had a NEGATIVE real return during that time period. I've owned balanced fund VWELX since 1953; but sold some for first time ever last year, due to possible changes by Biden, to cap gain rules, and the poor return outlook for the bond side of the 60/40 theme. R48
Yes R48, you are so right. Low return sucks. It makes me wonder whether it is worthwhile at all having an investment (especially if you are dividend focused like I am). I don't have any quick answers to the real-return question which is so important. Usually I compare it with the return I'd get on cash, which is even more pathetic. So maybe I'm only a little bit more savvy than your MIL, who I admire.
R48 reply: My blue added above. Yes, that is my posture. Have lived with the traditional asset allocation of a percent in stocks/bonds, but what about where bonds get pathetic...or a poor investment. Requires casting off the old strategy. When I retired i had 10% long term corporate bonds available to cushion the future. Those days are over for quite some time.
But real return? That is stacked against you, by institutional fees, taxes, inflation, and mortality. Taking from the zerohedge website, "on a long enough timeline, the survival rate for everyone drops to zero." So if you demand real return, take it while you can. Divert profits to something else. And while you can, have fun and challenges in your investing life. At least that's what I'm trying to do.
We must invest in the market as we find it, not as we wish it would be. We find low rates, so have to look at best ways to mitigate this.
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Post by retiredat48 on Feb 21, 2021 1:12:20 GMT
retiredat48 : "Why rationalize some decline in NAVs due rates rising, for intermediate and LT bond funds...as ballast?" One reason—the old thumb rule: a bond fund with dividends reinvested will return its (current) yield over its duration. So, while I have gotten completely out of US Treasury-heavy I/T stuff like VBILX/BIV, I am holding onto IT corporates (specific funds mentioned above). YES...but the rule requires one to hold for the duration of the fund (linked to maturity of underlying bonds), with dividends reinvested.IOW are you prepared to hold for that length of time. And the dilemma is, while you may get a 2.5-3% return, at that future times rates may be 6%. Now what? This is what happened to people in the late sixties to 1980...rates just kept rising. The bondholders could not catch up! Then fed P. Volcker smashed rates downward, and bonds went on a 40 year bull market run in prices/lower yields. But USA likely never to go past zero percent, or negative rates. So we sit around the top in bond prices. Hard to fight the fed, who is doing all it can to get inflation to return. R48
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Post by retiredat48 on Feb 21, 2021 1:23:21 GMT
Yikes! What's to be done? R48 suggests using cash and short duration bonds as ballast. That works, if you don't mind very low returns. Also, cash doesn't zag when stocks zig; it does nothing. However, it offers excellent optionality. Norbert brings up an excellent point I was going to raise...optionality. When one is in bond funds, there is a reluctance to sell any or do anything. By being in CASH (or very short term), an investor can survey, monitor etc and make some good investments as time rolls on. Like, I now own MJ, a pot stock etf, that has doubled. I never dreamed of holding same, before Covid. NJ legalizing marijuana was huge change for me. I bought PIMCO's new CEF, PDO, which will be a high yielder and is heading to a goodly premium. I own ARK funds, an actively managed set of funds by Cathy Wood. I did not know of her a year ago. That is, from COVID evolved "disruptor funds" concepts...that are leading the investment themes. So my number one asset I posted was "patience." In hindsight, I wish I would have re-entered market after March, earlier. But one bonus is the ability to see what was moving off the bottom the fastest, examine it, and invest in it. That old "using momentum to ones advantage" thing. I did so...but none of this is easy. R48
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Post by steadyeddy on Feb 21, 2021 2:02:50 GMT
R48 - The answer is simple (in my mind). Rising rates is a risk not a fact. The governments can NOT afford higher rates since they need to issue new bonds to replace maturing ones, and their cohorts (i.e., central banks) will indefinitely continue financial oppression. Note I said indefinitely. If folks are thinking the 80s style interest rates, foggetaboudit! Glad to engage in a debate. Let me turn the question around to you: Why do you think interest rates will continue to rise? Why do you think the central banks will allow that to happen? Regards. Steady...I didn't say interest rates/bond yields have to rise. Either way, bond holders have poor returns. If rates stay the same or go down (a very good possibility, and for years, like Japan), you suffer from low returns; if rates rise, you have NAV price falls counterbalancing any increase in yield. Personally, I think rates will remain low for years, while inflation rises...there's just so much bond money around. (Like, I never expected people would keep money in zirp mm funds, or 0.1% rate CDs, but they do. Yes, gvt will bail out companies, the gvt debt, and folks like you and me, on the backs of old people, poorer people with bank savings accts at 0%, and lethargic bond holders. Thus, I keep my eye on TLT LT Treasuries, as something I could buy/sell if I think rates will adjust lower for awhile. I have been avoiding TLT for some time now. R48 R48 - You definitely bring a perspective different from others on this board, so THANK YOU! Regarding low returns, I think we are in a low-return environment for any asset class for the next several years: 1) stocks are priced for perfection, 2) bonds you know no one knows.. etc
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Post by chang on Feb 21, 2021 3:06:46 GMT
retiredat48 : "Why rationalize some decline in NAVs due rates rising, for intermediate and LT bond funds...as ballast?" One reason—the old thumb rule: a bond fund with dividends reinvested will return its (current) yield over its duration. So, while I have gotten completely out of US Treasury-heavy I/T stuff like VBILX/BIV, I am holding onto IT corporates (specific funds mentioned above). YES...but the rule requires one to hold for the duration of the fund (linked to maturity of underlying bonds), with dividends reinvested.IOW are you prepared to hold for that length of time. And the dilemma is, while you may get a 2.5-3% return, at that future times rates may be 6%. Now what? This is what happened to people in the late sixties to 1980...rates just kept rising. The bondholders could not catch up! Then fed P. Volcker smashed rates downward, and bonds went on a 40 year bull market run in prices/lower yields. But USA likely never to go past zero percent, or negative rates. So we sit around the top in bond prices. Hard to fight the fed, who is doing all it can to get inflation to return. R48 Good point ... and there's a psychological angle, too. You may have to wait quite a time during the duration period to recoup early losses. That is, the fund's NAV may drop quickly, and then it may take a few years of reinvestment before the balance creeps back up and eventually delivers a return = the initial yield. Nobody likes to see their bonds fund lose 2% in a month when they were expecting only 2% dividend over a year.
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Post by racqueteer on Feb 21, 2021 3:07:09 GMT
Racq, The topic is bonds, equities, & inflation (at least rising rates). I picked the dates as far back as I can go for rising rates. You can use an equity index, a HY index, and an AGG type index from late 60s to early 80s if you have data - I did not. I do not understand the relevance of 2005 and using a different active fund in your post. Thanks. A Once you have the data, you can use portfolio visualizor and play with mixing the three and see what comes out. Your original chart had three different bond/equity levels, DODGX being 100% equity. I just didn't feel that DODGX was a good representative to compare with the two Vanguard offerings. If you were trying to look at something other than equity (and bond) level relative to results, I missed your intent. I'm not sure what 100% equity Vanguard fund would fit that 1970-1980 timefame, however? Probably the VWELX to VWINX offered the key information to see the interplay, though. Anyway, sorry if I only confused the issue.
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Post by steadyeddy on Feb 21, 2021 15:18:56 GMT
YES...but the rule requires one to hold for the duration of the fund (linked to maturity of underlying bonds), with dividends reinvested.IOW are you prepared to hold for that length of time. And the dilemma is, while you may get a 2.5-3% return, at that future times rates may be 6%. Now what? This is what happened to people in the late sixties to 1980...rates just kept rising. The bondholders could not catch up! Then fed P. Volcker smashed rates downward, and bonds went on a 40 year bull market run in prices/lower yields. But USA likely never to go past zero percent, or negative rates. So we sit around the top in bond prices. Hard to fight the fed, who is doing all it can to get inflation to return. R48 Good point ... and there's a psychological angle, too. You may have to wait quite a time during the duration period to recoup early losses. That is, the fund's NAV may drop quickly, and then it may take a few years of reinvestment before the balance creeps back up and eventually delivers a return = the initial yield. Nobody likes to see their bonds fund lose 2% in a month when they were expecting only 2% dividend over a year. Yeah but... if you shun bonds the only realistic alternative is cash. Additionally, I personally would not rule out negative interest rates in the US which suddenly makes existing low yield bonds look very attractive. As a contrarian, my base case is negative interest rates here in the US in not too distant future. I know this base case would raise some eye brows with the experts.
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Post by retiredat48 on Feb 21, 2021 19:12:05 GMT
steadye posted: "Yeah but... if you shun bonds the only realistic alternative is cash. Additionally, I personally would not rule out negative interest rates in the US which suddenly makes existing low yield bonds look very attractive. As a contrarian, my base case is negative interest rates here in the US in not too distant future. I know this base case would raise some eye brows with the experts."
Financial guru's who study this matter, say that if the world's reserve currency goes to negative rates, the capital market will come apart...unable to function. Gundlach says same. The bond exiting/selling will be so severe that bond prices will fall, and rates going back positively immediately.
My opinion is such bond selling will occur as rates approach zero, never getting there. In fact, I do not see bond fund managers buying negative rate bonds, having net monthly declines for their shareholders, while exposing them to considerable convexity risk if rates go back up, even a little.
Lastly, bonds are buttressed today by the fed and QE. Do we see fed supporting bonds into negative rates!! I think by law they cannot buy anything that has a projected loss to it.
Last year, Toyota issued bonds at 0.0001% rate. Sold out. Did you buy any eddy? Would Americans lend money to Toyota, at negative rates? Doubt it.
R48
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Post by yogibearbull on Feb 21, 2021 19:57:37 GMT
Negative rates are creation of central banks. BOJ and ECB have gone there, but the Fed has said so far that it won't go there. 2 things are interesting. 1. Years ago, it was said that the US financial system wasn't setup to handle, computer-wise, negative bond rates. Yet, TIPS of all maturities have been negative recently and we haven't heard of market or government computers crashing. 2. Some say that the Fed won't hold negative yielding Treasuries. So, let us see if the Fed holds negative yielding TIPS? Yes, $320.4 billion worth. www.newyorkfed.org/markets/soma-holdingsAssuming that we are getting out this pandemic OK, rates will continue to rise, having bottomed in March 2020. But if something very unexpected happens to crash the economy, and rates crash along with, they may go right through 0%, regardless of who has said what.
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Post by Norbert on Feb 21, 2021 20:44:09 GMT
Good point ... and there's a psychological angle, too. You may have to wait quite a time during the duration period to recoup early losses. That is, the fund's NAV may drop quickly, and then it may take a few years of reinvestment before the balance creeps back up and eventually delivers a return = the initial yield. Nobody likes to see their bonds fund lose 2% in a month when they were expecting only 2% dividend over a year. Yeah but... if you shun bonds the only realistic alternative is cash. Additionally, I personally would not rule out negative interest rates in the US which suddenly makes existing low yield bonds look very attractive. As a contrarian, my base case is negative interest rates here in the US in not too distant future. I know this base case would raise some eye brows with the experts. Would you mind explaining? Are you a contrarian on principle? Or, are you seeing economic issues that lead you to expect negative rates in the near future? TIA, N.
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Post by steadyeddy on Feb 21, 2021 21:51:02 GMT
..... But if something very unexpected happens to crash the economy, and rates crash along with, they may go right through 0%, regardless of who has said what. This is my sentiment too.
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Post by steadyeddy on Feb 21, 2021 21:56:33 GMT
steadye posted: "Yeah but... if you shun bonds the only realistic alternative is cash. Additionally, I personally would not rule out negative interest rates in the US which suddenly makes existing low yield bonds look very attractive. As a contrarian, my base case is negative interest rates here in the US in not too distant future. I know this base case would raise some eye brows with the experts."Financial guru's who study this matter, say that if the world's reserve currency goes to negative rates, the capital market will come apart...unable to function. Gundlach says same. The bond exiting/selling will be so severe that bond prices will fall, and rates going back positively immediately. My opinion is such bond selling will occur as rates approach zero, never getting there. In fact, I do not see bond fund managers buying negative rate bonds, having net monthly declines for their shareholders, while exposing them to considerable convexity risk if rates go back up, even a little. Lastly, bonds are buttressed today by the fed and QE. Do we see fed supporting bonds into negative rates!! I think by law they cannot buy anything that has a projected loss to it. Last year, Toyota issued bonds at 0.0001% rate. Sold out. Did you buy any eddy? Would Americans lend money to Toyota, at negative rates? Doubt it. R48 R48 - I am not an expert by any means and I did not buy Toyota bonds World's negative yielding debt has reached $18T trillion Link There are clearly large institutional investors (sovereign funds, pension funds, even central banks) that hold these negative yielding puppies. I am not proficient enough in the reasons why such size of negative yielding debt has buyers, but let us not simply discount it away as a strange thing. Do I feel strongly that the US will see negative interest rates? You bet! I do not know when but the next major leg down in the economy will take us to negative rates.
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Post by steadyeddy on Feb 21, 2021 22:09:41 GMT
Yeah but... if you shun bonds the only realistic alternative is cash. Additionally, I personally would not rule out negative interest rates in the US which suddenly makes existing low yield bonds look very attractive. As a contrarian, my base case is negative interest rates here in the US in not too distant future. I know this base case would raise some eye brows with the experts. Would you mind explaining? Are you a contrarian on principle? Or, are you seeing economic issues that lead you to expect negative rates in the near future? TIA, N. Norbert - I am a contrarian in principle. I do not want to pretend to know the factors that could cause economic harm or change the optimistic view currently being held.
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Post by rhythmmethod on Feb 22, 2021 0:30:10 GMT
Would you mind explaining? Are you a contrarian on principle? Or, are you seeing economic issues that lead you to expect negative rates in the near future? TIA, N. Norbert - I am a contrarian in principle. I do not want to pretend to know the factors that could cause economic harm or change the optimistic view currently being held. I’m contrary, but not much contrarian. However, I frequently take a small portion 3-5% and will buy some of what everyone thinks is terrible. Case in point, this spring and summer I was buying some XLE. Norbert , eloquently said why he wouldn’t touch it. Long term I absolutely agree. However YTD it’s up over 28%. I now need to figure out when to sell it. My point is I think the most unloved is a reasonable hedge against the current grain. Thus my modest, allocation to EDV. When looking at its history, I didn’t notice two losing years in a row. It’ll be interesting to save this thread and look back in 18 months or so. exit to add - of course if I were really a player my bets would be bigger. In my thesis I should sell my XLE and buy EDV, and maybe GDX. I might just do it.
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Post by retiredat48 on Feb 22, 2021 5:48:00 GMT
There's a difference between being a "contrarian investor" of stocks, stock funds versus being contrarian re an economic happening, such as negative interest rates.
The fed has repeatedly stated they are not going to negative rates. They can control this by SELLING some of the billions and billions of QE monthly bond purchases they made since last March, done to undergird the bond markets even including high yield junk bonds.
Old Wall Street mantra: "Don't fight the fed."
There's a personal aspect here as well. That is, who wants to be the first ever fed chairman and US Treasury Secretary that goes into the unknown territory of negative yields, lest we have an economic collapse and history will surely blame them!
So I view Norbert is asking: what are the data or indicators that USA will go to negative yields?
R48
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Post by Mustang on Feb 22, 2021 11:16:52 GMT
anitya , You were comparing Wellington and Wellesley Income.
As I transition from the accumulation phase of investing to the withdrawal phase I am building up our proportion of Wellesley Income in our portfolio. I first bought Wellington and Wellesley Income maybe 40 years ago and then got out of Wellesley Income because of what I considered poor performance. Wellington was a much better performer. It still is. According to Morningstar, Wellesley Income's 15 year return averages 7.18% per year. Wellington's is 8.46%. Its 10-year return is 7.55% compared to 9.66%. Although I don't have the data at my fingertips I remember it was pretty much the same back then. That was why I got rid of Wellesley Income. But we are now in a different phase of our life. Wellesley Income is less volatile. And I will be using it instead of bonds to bring a little more stability in our portfolio. According to Bengen the worst time to retire was 1968. Using his 4% rule I tested a 30-year retirement period using Vanguard Wellington. Starting retirement in 1968 with $500,000 it ran out of money after 25 years. I wanted to compare Wellington and Wellesley so I changed the start date to 1971. Suprisingly, the 30-year retirement became successful and Wellington had an ending balance of $1.43 million. I assume the 1968 retirement was what they call a sequence-of-return failure. I then did a 30-year retirement period using Wellesley Income starting in 1971. The starting investment was the same ($500,000) and all of the withdrawals were the same but Wellesley Income had an ending balance of $2.99 million. Wellesley Income wins the retirement test during the stagflation years. I did the same test on both funds changing the start date to 1990. Wellington had an ending balance of $3.75 million, Wellesley Income $2.61 million. Wellington wins the retirement test during the boom years. If I could see the future I would know which one to invest in. Since I can't I have decided to make that portion of our portfolio 50% Wellington and 50% Wellesley Income. These tests are also why I have modified Bengen's 4% Rule for our withdrawals.
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Post by steadyeddy on Feb 22, 2021 13:41:37 GMT
There's a difference between being a "contrarian investor" of stocks, stock funds versus being contrarian re an economic happening, such as negative interest rates. The fed has repeatedly stated they are not going to negative rates. They can control this by SELLING some of the billions and billions of QE monthly bond purchases they made since last March, done to undergird the bond markets even including high yield junk bonds. Old Wall Street mantra: "Don't fight the fed."
There's a personal aspect here as well. That is, who wants to be the first ever fed chairman and US Treasury Secretary that goes into the unknown territory of negative yields, lest we have an economic collapse and history will surely blame them! So I view Norbert is asking: what are the data or indicators that USA will go to negative yields? R48 R48 - I think I have kicked up enough dust/dirt on this topic. I am not sure data will become evident way before the Fed action to go to negative rates. I believe another gray/black swan event will easily take us there. Do I see such an event on the horizon? possibly...many related events could band together to create a wooshing sound on the economy deflating, but I hate to further kick up more dust.
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Post by helmut on Feb 22, 2021 20:18:27 GMT
Good thread, Captain! All my FI is either in balanced funds as nromsted , above, MS (PIMIX, PTIAX) core + (VWALX, PHMIX) or barbell with BSV (pretty large position) EDV (very small position ~3+%)). Obviously EDV has been getting killed recently. In my BTD style I'm adding very small amounts and will again if it gets under 130. I think long term a vanilla FI in a balanced fund is ok to B&H as the management adds value, IMO. Could I pick better MS? Probably and may explore it but these things seem to move in lock-step mostly. That said, I'm also holding the most cash % in a very long time. I believe for most investors deciding on a FI allocation is more important than the specific funds. I'm def staying away from IT indexes, currently however. edit to add- Curious to see how helmut is dealing with the EDV massacre. He's seen that thing get killed and come back to life a few times. I've been out of pocket for about a week. Single digit outside temperature without electric power does not make a fun time. This is not a EDV massacre, it's a buying opportunity. EDV has a 10 year annual TR average of over 10% per yer so no I'm not worried. Fortunately I bought RPV last summer and that has done very well for me and that is how it works for me. Long-term treasuries are not a perfect risk parity in the short term but works pretty well in the long term. helmut
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Post by rhythmmethod on Feb 22, 2021 20:44:13 GMT
Good thread, Captain! All my FI is either in balanced funds as nromsted , above, MS (PIMIX, PTIAX) core + (VWALX, PHMIX) or barbell with BSV (pretty large position) EDV (very small position ~3+%)). Obviously EDV has been getting killed recently. In my BTD style I'm adding very small amounts and will again if it gets under 130. I think long term a vanilla FI in a balanced fund is ok to B&H as the management adds value, IMO. Could I pick better MS? Probably and may explore it but these things seem to move in lock-step mostly. That said, I'm also holding the most cash % in a very long time. I believe for most investors deciding on a FI allocation is more important than the specific funds. I'm def staying away from IT indexes, currently however. edit to add- Curious to see how helmut is dealing with the EDV massacre. He's seen that thing get killed and come back to life a few times. I've been out of pocket for about a week. Single digit outside temperature without electric power does not make a fun time. This is not a EDV massacre, it's a buying opportunity. EDV has a 10 year annual TR average of over 10% per yer so no I'm not worried. Fortunately I bought RPV last summer and that has done very well for me and that is how it works for me. Long-term treasuries are not a perfect risk parity in the short term but works pretty well in the long term. helmut Thanks, helmut. Right or wrong this fits my thesis. I added today. Stay safe. Let us know how you are doing.
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Post by steadyeddy on Feb 22, 2021 22:25:31 GMT
I've been out of pocket for about a week. Single digit outside temperature without electric power does not make a fun time. This is not a EDV massacre, it's a buying opportunity. EDV has a 10 year annual TR average of over 10% per yer so no I'm not worried. Fortunately I bought RPV last summer and that has done very well for me and that is how it works for me. Long-term treasuries are not a perfect risk parity in the short term but works pretty well in the long term. helmut Thanks, helmut . Right or wrong this fits my thesis. I added today. Stay safe. Let us know how you are doing. I too added to LT Treasuries today... only time will tell if this is a good bet or not.
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Post by fishingrod on Feb 22, 2021 22:48:47 GMT
For quick reference, In 2008, in two months during the turmoil- 10/31/2008-12/31/2008- EDV went up quickly 48.63% in price. After that... From 12/31/2008 to 3/31/2010 watchout!! down 71.98% in price. Went from 145.88 on 12/31/2008 to 76.33 on 3/31/2010. We seem to be in the middle. Right now we are 23.62% down in price from the recent top. Hmmm. A good blip down but, is it done?
I think I may change my avatar, perhaps only show the fish. I feel like I am shoving a big fish in everybody's face every time I post. How do you like that? Big fish!!
Fishingrod
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Post by Chahta on Feb 22, 2021 23:16:24 GMT
For quick reference, In 2008, in two months during the turmoil- 10/31/2008-12/31/2008- EDV went up quickly 48.63% in price. After that... From 12/31/2008 to 3/31/2010 watchout!! down 71.98% in price. Went from 145.88 on 12/31/2008 to 76.33 on 3/31/2010. We seem to be in the middle. Right now we are 23.62% down in price from the recent top. Hmmm. A good blip down but, is it done?
I think I may change my avatar, perhaps only show the fish. I feel like I am shoving a big fish in everybody's face every time I post. How do you like that? Big fish!!
Fishingrod
Keep it as-is. You are one of the few to show your mug here!
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