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Post by Chahta on Feb 22, 2021 23:24:39 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 I am not familiar with your investing style. How do you view EDV? As ballast for equities or as an income generator? Not working so well as ballast these days. Not many bonds are.
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Post by fishingrod on Feb 22, 2021 23:47:59 GMT
Currently, I do not own EDV or anything longer than VWALX. EDV is really a step away from my volatility spectrum for a bond holding. The duration composite which drives EDV makes it just a little too volatile for my liking. I might entertain a small position if the market went crazy against it, but it would still only be small due to my already quite diversified holdings. Don't hold me to my words.....
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Post by retiredat48 on Feb 23, 2021 0:09:13 GMT
fishingrod, which one's the fish? R48
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Post by fishingrod on Feb 23, 2021 0:15:29 GMT
Hi R48,
I am the one licking my lips in pride. The fish has a treble hook still stuck in it's lips. Thanks for asking. No suckers involved!! Fishingrod
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Post by yogibearbull on Feb 23, 2021 1:07:35 GMT
Of all conservative/moderate-allocation funds I track, only VWINX/VWIAX was up today - not by much but up is up. Its cyclical stocks overcame the drag from its bonds.
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stats
Lieutenant
Posts: 53
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Post by stats on Feb 23, 2021 1:30:13 GMT
We do own earlier vintages. upon death she plans to convert my Traditional to an IRA. And over the next 7 years she will convert some each year to Roth. Hopefully this will reduce her RMD obligations. Stats
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Post by steadyeddy on Feb 23, 2021 1:55:05 GMT
Of all conservative/moderate-allocation funds I track, only VWINX/VWIAX was up today - not by much but up is up. Its cyclical stocks overcame the drag from its bonds. Nice - Wellesley is my largest holding, and I intend to keep it that way.
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Post by helmut on Feb 23, 2021 21:06:29 GMT
Chahta "I am not familiar with your investing style. How do you view EDV? As ballast for equities or as an income generator? Not working so well as ballast these days. Not many bonds are."
I'm not sure what your definition of ballast is but when I hear that word I think that it just keeps you from sinking further. I use EDV for risk parity. I'm not talking about risk parity in the traditional sense of using leverage so it does not really work if you are a short-term trader. EDV is extremely volatile on it's own but when matched with volatile equities it usually makes a less volatile portfolio but you may not see that volatility smooth out on a weekly or short-term basis. helmut
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Post by chang on Apr 28, 2021 13:22:28 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. Just curious, all you EDV buyers: if you want the anti-equity correlation of LT Treasuries as a hedge, plus the yield (such as it is), and believe that interest rates aren't going to shoot up and whack your investment, BUT also want an inflation hedge, which may turn out to be the real danger facing us, why don't you buy LT TIPs like LTPZ instead of straight LT Treasuries like EDV/TLT? If I were to buy into LT bonds I would probably go that way.
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Post by Chahta on Apr 28, 2021 15:37:58 GMT
Sometimes I don’t quite understand the inflation worry. If one holds 40-50% equities doesn’t that take care of inflation? Yes if it’s a bad equity year the portfolio wound suffer but long term why sweat it? Have equities ever not beat inflation long term?
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Post by rhythmmethod on Apr 28, 2021 18:03:07 GMT
Thanks, helmut . Right or wrong this fits my thesis. I added today. Stay safe. Let us know how you are doing. Just curious, all you EDV buyers: if you want the anti-equity correlation of LT Treasuries as a hedge, plus the yield (such as it is), and believe that interest rates aren't going to shoot up and whack your investment, BUT also want an inflation hedge, which may turn out to be the real danger facing us, why don't you buy LT TIPs like LTPZ instead of straight LT Treasuries like EDV/TLT? If I were to buy into LT bonds I would probably go that way. Good question. If I were starting now your hypothesis above is what I'd probably do. I'm no longer an EDV buyer, but an EDV holder. My exposure is small enough that it's not a game changer either way. If a black, brown or dark grey swan approaches might EDV be better?? That's what my small insurance policy is for.
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Post by steadyeddy on Apr 28, 2021 20:26:57 GMT
Just curious, all you EDV buyers: if you want the anti-equity correlation of LT Treasuries as a hedge, plus the yield (such as it is), and believe that interest rates aren't going to shoot up and whack your investment, BUT also want an inflation hedge, which may turn out to be the real danger facing us, why don't you buy LT TIPs like LTPZ instead of straight LT Treasuries like EDV/TLT? If I were to buy into LT bonds I would probably go that way. Good question. If I were starting now your hypothesis above is what I'd probably do. I'm no longer an EDV buyer, but an EDV holder. My exposure is small enough that it's not a game changer either way. If a black, brown or dark grey swan approaches might EDV be better?? That's what my small insurance policy is for. Exactly my thinking too. I also stopped accumulating LT Treasuries. A sprinkle of spice in the mix.
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Post by steadyeddy on Apr 28, 2021 20:29:01 GMT
Sometimes I don’t quite understand the inflation worry. If one holds 40-50% equities doesn’t that take care of inflation? Yes if it’s a bad equity year the portfolio wound suffer but long term why sweat it? Have equities ever not beat inflation long term? Chahta , if inflation takes off, equities will suffer too.. that IS the worry.
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Post by Chahta on Apr 28, 2021 22:35:13 GMT
Well I think that 2-3% inflation might be good for profits. I don’t think higher is in the cards right now. This would have to be a really screwed up economy to get high inflation. On the other hand there seems to be a lot of money chasing real estate now.
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Post by chang on Apr 29, 2021 0:06:08 GMT
Sometimes I don’t quite understand the inflation worry. If one holds 40-50% equities doesn’t that take care of inflation? Yes if it’s a bad equity year the portfolio wound suffer but long term why sweat it? Have equities ever not beat inflation long term? I believe you're right - equity gains beat inflation (and everything else) long term. I was just wondering what advantage EDV would have over a comparable duration TIPs fund like LTPZ in the current environment.
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Post by Chahta on Apr 29, 2021 12:04:43 GMT
I too am trying to make a case for LT treasuries, IT bonds, tips etc. I suppose if buying low is right then now is a good time. But looking at LTPZ it sure looks like a better ballast fund with less volatility (but still has plenty). But less money to be made as well. link
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Post by jcserc on Apr 29, 2021 13:01:02 GMT
In my case, the TLT position is (will) be small enough that adding another layer of complication in the decision process (trying to time inflation) won't make any material impact. Hence, decided to keep it simple to what has proven to be a good anti-equity correlation (plus the yield).
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Post by jongaltiii on Jul 30, 2021 2:58:01 GMT
Good thread here. I recently read that VWELX is opening to 3rd parties. Checked Fidelity and it still shows closed. Started to compare it to FBALX and except for the lower ER (which I love)… I didn’t see a compelling reason why I should entertain VWELX over FBALX or FMSDX IF it was to open in Fido. Am I missing something?
OTOH… if PWCRX were to open… I think I would have no issue moving some funds to it based on LT performance etc.
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Post by yogibearbull on Jul 30, 2021 3:05:59 GMT
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Post by anitya on Jul 30, 2021 6:48:52 GMT
The following is re VWELX reopening -"Reopening Vanguard Wellington FundVanguard also announced today that, due to improved fund liquidity and capacity, the firm will reopen Vanguard Wellington Fund to all investors immediately." [Underline mine] Their website already removed the "closed to new investors" note. investor.vanguard.com/mutual-funds/profile/VWELX
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Post by yogibearbull on Jul 30, 2021 13:07:15 GMT
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Post by retiredat48 on Jul 30, 2021 15:20:59 GMT
Thanks...that's really a large outflow of dollars leaving the fund. IMO this is not healthy for any fund. I note VWELX bond side has a duration of about 8 years, and an average weighted bond price of close to 108. This means a built-in loss of 1% a year if bonds held to maturity. Does anyone have where the VWELX performance is broken out showing the stock side contribution versus the bond side, over the years?? Disclosure...For the first time, I sold some of my VWELX, held since 1953...releasing tax handcuffs ahead of Biden potential cap gain tax changes. R48
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Post by anitya on Jul 30, 2021 18:52:35 GMT
Is not the corporate talk for that the "improved fund liquidity and capacity?" I had higher expectations from Vanguard of transparency and openness but they had to spin it in positive words. They would have been fine not to say anything. I like the new Vanguard for better customer service and trying to march into the 21stt century but I am afraid we are losing the previously good parts of Vanguard as they try to become like other asset managers. I wrote the above yesterday and then decided instead to just underline the corporate talk. Not looking for a comment.
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Post by paulr888 on Jul 30, 2021 23:41:57 GMT
I like to look at Fidelity website under Performance and Risk tab. Scroll all the way down on the right.
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Post by yogibearbull on Jul 31, 2021 0:18:01 GMT
I like to look at Fidelity website under Performance and Risk tab. Scroll all the way down on the right. Fido is a good source too but limited to funds (and classes) available on Fido platform. Also, the data are for specific classes, so no info on classes not available on Fido platform. M* data are cumulative for all classes of a fund. One can also find this info in fund reports under Financial Highlights.
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Post by paulr888 on Jul 31, 2021 0:39:08 GMT
I like to look at Fidelity website under Performance and Risk tab. Scroll all the way down on the right. Fido is a good source too but limited to funds (and classes) available on Fido platform. Also, the data are for specific classes, so no info on classes not available on Fido platform. M* data are cumulative for all classes of a fund. One can also find this info in fund reports under Financial Highlights. YBB .... I can't find Financial Highlights. Where is it?
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Post by yogibearbull on Jul 31, 2021 0:58:41 GMT
paulr888, each fund report (and prosectus) has a tabular section called "Financial Highlights" that includes lot of good info for 3-5 years. But I don't like fund reports by firms like Pimco and others that cram dozen or more funds into a single fund report.
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Deleted
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Post by Deleted on Aug 1, 2021 16:12:46 GMT
The bond question was difficult for me. Until earlier this year, I held none. All in on equities, primarily using a dividend growth strategy for generating income. Then I got a large sum of money. Thought it was time to be a bit more cautious. Looked at BND and BIV. This was December 2020. Decided that it did not make sense to invest in these when I had access to the Federal Thrift Savings Plan G fund - basically a money market that earns intermediate rates - guaranteed not to lose principal. Still a negative return. I keep deploying more and more cash to equities. I don't have a good answer. I know that chunk of change in the G fund keeps me sane and grounded with what I have in the market. That's worth it to me right now. But, if we have this bizarre situation where the price level increases and rates continue to stay low and real returns get even more negative? I might have to go back to being all in on my dividend stocks for income with a large slice of growth for appreciation. By the way - I am 59, still working, still accumulating.
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Post by Chahta on Aug 1, 2021 21:24:47 GMT
That far from retirement, assuming 67 is your retirement age, I would not hold major amounts of bonds. But I would certainly have some short term bonds to deploy into equities at the next correction. I am certain there will be one before you are 67.
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on Aug 23, 2021 12:52:52 GMT
We will continue to live with a 4% AWR and annually rebalance back to 50/50 when at 55/45 or 45/55.
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