comlb
Lieutenant
Posts: 67
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Munis
Sept 10, 2023 23:17:17 GMT
Post by comlb on Sept 10, 2023 23:17:17 GMT
anyone have Muni funds they like or strategies for picking individual munis?
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Post by steelpony10 on Sept 10, 2023 23:32:56 GMT
comlb , We’ve had a muni fund for our safe money for close to 45 years now on reinvestment. The current holding is VWAHX. It was (would) be used to make payments by just turning off the dividend reinvestment. Currently we have no payments so we’re picking up cheap income monthly (on reinvestment at about 3%+) since munis have been hit so hard the last couple years.
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Post by Chahta on Sept 11, 2023 1:03:12 GMT
I like NMBAX, NHMAX and NVHAX. Depends on the yield you want. All selling pretty cheap now with interest rates high. NHMAX is paying 5.6% tax free, but can be volatile.
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Post by FD1000 on Sept 11, 2023 3:47:34 GMT
I don't see the sign yet. BTW, I stopped trading Munis several months ago. Attachments:
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Post by habsui on Sept 11, 2023 5:21:23 GMT
I have held VWALX for many years.
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Munis
Sept 11, 2023 20:54:30 GMT
Post by Chahta on Sept 11, 2023 20:54:30 GMT
comlb, depends if it is for a trade or income.
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hondo
Commander
Posts: 145
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Post by hondo on Sept 15, 2023 13:59:00 GMT
I have held VWALX for many years.
Same here.
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Munis
Sept 18, 2023 13:44:01 GMT
Post by win1177 on Sept 18, 2023 13:44:01 GMT
I use a mix of VWALX and VWIUX for “safe income”, it’s a significant percentage of our fixed income allocation. Usually lean about 40% VWALX, rest in VWIUX. Also have some taxable funds in our IRA’S, Roth accounts, but not as large (we are very “heavy” in our equity allocation), mainly VBILX and VWEHX. Our retirement accounts are not nearly as large our taxable accounts.
We lean towards higher quality fixed income to provide some “cushion” for our equity risks. Also looking at buying some state tax free bonds, but (so far) haven’t found any to buy. Much of fixed income money is still in money markets currently, but adding to our two muni funds each month.
Currently at about 86% equity, 4.5% fixed income, rest (9.5%) in cash MMA.
Win
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Munis
Sept 18, 2023 20:20:41 GMT
Post by FD1000 on Sept 18, 2023 20:20:41 GMT
Observation: high quality bond funds didn't provide a cushion since 1-1-2022 while bank loans, lower rated bonds, did. Markets can be unpredictable a lot longer than you think. Since 1-1-2022...SPY=(-4%)...BND=(-12.55%)...VWALX=(-7.8%)...Bank Loans: EIFAX=+7.25...FAFRX=+9.1.
Attachments:
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Munis
Sept 18, 2023 23:05:47 GMT
Post by roi2020 on Sept 18, 2023 23:05:47 GMT
Many consider 2022 to be the worst year ever for bonds. High-quality bonds did not provide protection against declines in the stock market last year. Markets may be difficult to predict but there is a good probability that high-quality bonds will provide ballast during future equity sell-offs.
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Munis
Sept 19, 2023 3:36:33 GMT
Post by FD1000 on Sept 19, 2023 3:36:33 GMT
1) What worked before doesn't always work and it could take awhile 2) High rated bonds are still doing bad in 2023, while BL are doing great. 3) BND=US Total bond index and one of the most popular bond fund made just 2.2% total in the last 5 years, while EIFAX=BL made 20.5% ( schrts.co/HKNcfDuV). Attachments:
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Munis
Sept 21, 2023 13:22:53 GMT
via mobile
Post by Chahta on Sept 21, 2023 13:22:53 GMT
They work perfect for tax-free income.
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Post by FD1000 on Sept 22, 2023 4:10:06 GMT
1) What worked before doesn't always work and it could take awhile2) High rated bonds are still doing bad in 2023, while BL are doing great. 3) BND=US Total bond index and one of the most popular bond fund made just 2.2% total in the last 5 years, while EIFAX=BL made 20.5% ( schrts.co/HKNcfDuV). So far SP500 fell about 5% from the top in July 2023, QQQ fell over 7%....high-rated bonds continue to go down, including Munis...but Bank loans are nicely up, even today they did much better, several made nothing or lost -0.1% Sure, sometimes in the future high-rated bonds will work.
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Post by habsui on Sept 24, 2023 20:08:24 GMT
The yield on munis is working well now..
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Post by Chahta on Sept 25, 2023 1:45:43 GMT
The yield on munis is working well now.. NHMAX is providing 5.5% tax free currently.
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Munis
Sept 25, 2023 3:28:28 GMT
Post by FD1000 on Sept 25, 2023 3:28:28 GMT
Why would I buy anything based on only the yield? I don't want to spend time on calculation. Based on M* TTM yield NHMAX pays 5.6% and FAFRX pays 7.6%. NHMAX chart looks bad YTD (+ the last 3 months) with much higher volatility and much lower performance. BTW, the perception that a category is safe is misleading. When rates go up higher-rated bonds lose money and bank loans do better. I don't have an idea how long it would last. The BL uptrend is going on for 5-6 months. I also added treasuries VGIT. At the beginning of the year many "experts" and even me predicted that 2023 would be a good year for higher-rated bonds. That was true in the first several weeks, but that fell apart completely in Feb of 2023. This is not the first time I posted about BL, see example from 2+ months ago ( www.mutualfundobserver.com/discuss/discussion/61085/anybody-investing-in-bond-funds/p6). Attachments:
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Post by habsui on Sept 25, 2023 6:32:41 GMT
Because I can live of 5% tax free just fine..
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Munis
Sept 25, 2023 12:33:57 GMT
via mobile
Chahta likes this
Post by chang on Sept 25, 2023 12:33:57 GMT
I’ve been hiding out in treasuries and RPHIX since the early to middle days of the bond crash. Wasn’t the first to get out, but wasn’t the last, either.
I’ve been of the view that I’ll go longer once yields hit their max. Others have said that that would be too late, but so far I have been happy with the strategy. When others were recommending we scoop up the 10Y at 4%, I kept saying there’s no hurry, and I think I was right on that.
So - make it easy for me. Is now the time to get back into VWALX?
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Munis
Sept 25, 2023 14:03:13 GMT
Post by fishingrod on Sept 25, 2023 14:03:13 GMT
VWALX has had some time to repopulate most of their portfolio of bonds to higher coupon bonds as the average coupon was 4.42%(8/31/2023) and SEC yld is 4.51%(9/22/2023) and the yield to maturity was 4.54%(8/31/2023) All pretty close. Distribution yield of 3.68%(8/31/2023).
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Post by yogibearbull on Sept 25, 2023 14:23:52 GMT
The last washout drops tend to be scary. Watch muni ETF MUB & for more adventurous the HY muni CEF NMZ (discount -5.25%). There are many factors - tax-loss selling (buyers since 2019 have losses or are barely even); maybe 1 more Fed rate hike; possibly the 3rd BAD year in a row for most bonds (never happened before in the bond history), etc. Be ready if you have some dry powder to add or start a new position; DCA may be an option. No body will ring a bell at the bottom or the top. stockcharts.com/h-sc/ui?s=MUB&p=D&yr=1&mn=0&dy=0&id=p04713007517
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Post by newtecher on Sept 25, 2023 14:35:45 GMT
So - make it easy for me. Is now the time to get back into VWALX? Yes, although long treasuries are even better.
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Post by chang on Sept 25, 2023 16:34:58 GMT
So - make it easy for me. Is now the time to get back into VWALX? Yes, although long treasuries are even better. Not so obvious when the yield curve is inverted.
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Munis
Sept 25, 2023 16:58:58 GMT
Post by newtecher on Sept 25, 2023 16:58:58 GMT
Yes, although long treasuries are even better. Not so obvious when the yield curve is inverted. It's never obvious except in hindsight. Finding the exact bottom is impossible but the value is there. Munis are probably better than treasuries from the political point of view (less risk from, say, another, debt ceiling crisis). But treasuries always fare better in a recession, which is imminent IMO (probably before the end of the year). I ma buying both muni CEFs and treasuries.
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Post by steelpony10 on Sept 25, 2023 17:53:01 GMT
newtecher , I was under the impression that you don’t get a recession until all current demand for goods and services has been met, usually after layoffs also. The current economy seems to be humming along. A government shutdown is an annual threat along with raising the debt ceiling. Both are in fact great investing opportunities. Annual facts you can count on. We’ve held a muni for 45 years on reinvestment helping state entities, hospitals, schools et.. We’re lowering our cost basis every month now. Treasuries just help finance deficit spending for those that are ok with how the Feds use those funds. I have mixed feelings about that so I invest elsewhere.
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Munis
Sept 25, 2023 19:02:13 GMT
Post by newtecher on Sept 25, 2023 19:02:13 GMT
newtecher , I was under the impression that you don’t get a recession until all current demand for goods and services has been met, usually after layoffs also. The current economy seems to be humming along. A government shutdown is an annual threat along with raising the debt ceiling. Both are in fact great investing opportunities. Annual facts you can count on. We’ve held a muni for 45 years on reinvestment helping state entities, hospitals, schools et.. We’re lowering our cost basis every month now. Treasuries just help finance deficit spending for those that are ok with how the Feds use those funds. I have mixed feelings about that so I invest elsewhere. Recessions, like price bottoms become obvious only in hindsight, after all data and revisions come in. It is very likely the US will enter recession before year end but, officially, it would be announced only a few months later, after all data is processed and revised. The economy typically appears to be in a soft/no landing mode right up to the start of the recession.
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Munis
Sept 25, 2023 20:21:02 GMT
Post by sortatino2 on Sept 25, 2023 20:21:02 GMT
Chang - Like you I have been hiding out for some time. In my case in 100% MM since Feb of 2022. Two thoughts... First, after the first rate cut in a cycle (futures say July 2024) it takes anywhere from 200+ to 600+ days to hit a market bottom (see link). I would not buy and hold VWALX (not sure if that is your plan) but would consider trading HY Muni in cycles during this time or not buying if you don't want to trade. As that market goes lower and bottoms at some point after the first rate cut there will be a better entry point to buy and hold HY Muni (once again not sure if that is your plan) redirect.viglink.com/?key=71fe2139a887ad501313cd8cce3053c5&subId=7191902&u=https%3A//www.fool.com/investing/2022/10/30/do-fed-rate-cuts-signal-bear-market-bottoms/Second thought, having said that, there was a thread a year or so back (can't recall location) where through portfolio visualizer the conclusion was junkier stuff performs better (than treasuries/high quality bonds) leading up to the first rate cut, and treasuries/hih quality perform better during a rate cut cycle.This certainly seems to be the current experience with the performance of Bank Loan Funds this year. So while you could buy and hold High Yield Muni now, it may be a bumpy ride and ultimately as market bottoms there will be a better entry point. So back to it may be best to trade cycles until such time or not buy (if you don't want to trade) until we are into the rate cut cycle starting next year and markets have gone down. . As for me, I am still 100% in Vanguard Federal MM enjoying 5.29% returns. I just began retirement in June and while I used to trade Bond Funds, I have more than I need for retirement and I am content with risk free 5.29%. I have passed on a few cycles of trading HY Munis and Bank Loans that in the past I would have invested in. When MM rates go down I will feel more compelled to be a bit more active.
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Post by sortatino2 on Sept 25, 2023 20:35:06 GMT
Here is the punch line from the link in my previous post...
"Since this century began, investors have navigated their way through four bear markets... In each of the three previous bear markets, it took a long time for the stock market to bottom out after the central bank enacted the first rate cut of an easing cycle.
Less than a year into the dot-com bubble bursting, on Jan. 3, 2001, the Fed began an easing cycle that would see the federal funds rate move from 6.5% to 1.75% in about 11 months. However, it took until Oct. 9, 2002, before the stock market reached its nadir. That's a 645-calendar-day wait from initial decrease to actual bottom.
As the financial crisis began to take shape, the nation's central bank reduced the federal funds rate from 5.25% to an eventual range of 0%-0.25%. Though this rate-cutting began on Sept. 18, 2007, the stock market didn't bottom out until March 9, 2009, or 538 calendar days later.
The Fed, once again, began cutting its federal funds target rate on July 31, 2019, with this easing cycle taking rates from a range of 2%-2.25% back to 0%-0.25%. With the coronavirus crash hitting its bottom on March 23, 2020, we're talking about a 236-calendar-day difference between initial rate cut and actual market bottom.
To be clear, there is no such thing as a foolproof indicator or metric that accurately predicts when bear markets will occur or precisely where they'll bottom. But the data here clearly shows that Federal Reserve rate cuts aren't a good predictor of stock market bottoms. Given that it usually takes multiple quarters for rate changes to have tangible impacts on the U.S. economy, it makes sense that most market bottoms occur much later.
If the current federal funds rate forecast holds true and history repeats itself, a stock market bottom may not be in the cards until late 2024 or well into 2025"
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Munis
Sept 25, 2023 20:38:57 GMT
via mobile
Post by Chahta on Sept 25, 2023 20:38:57 GMT
I’ve been hiding out in treasuries and RPHIX since the early to middle days of the bond crash. Wasn’t the first to get out, but wasn’t the last, either. I’ve been of the view that I’ll go longer once yields hit their max. Others have said that that would be too late, but so far I have been happy with the strategy. When others were recommending we scoop up the 10Y at 4%, I kept saying there’s no hurry, and I think I was right on that. So - make it easy for me. Is now the time to get back into VWALX? Unless you are a super trader I believe we are close enough to buy 10 year treasuries. Once it is apparent that 4.5% for 10 years is no longer available there will be a mad rush to buy them and original holders will make nice CGs. But this may only be a strategy for income investors. 4.5% for 10 years will turn out to be big IMHO. Right now 5% MM has us mesmerized. I have been listening and reading about when to buy longer Treasuries and the above is what I have learned. Who is smart enough to know when rates have topped? I have heard that since the curve is only slightly inverted ST rates will drop fast and leave the ST holders looking to buy LT. I'm not saying this is imminent but catching the move before the top is difficult. Warning: I am no expert. 😀 But then again the same reasoning applies to bond funds too.
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Munis
Sept 25, 2023 20:52:46 GMT
Post by sortatino2 on Sept 25, 2023 20:52:46 GMT
The link to the article I posted above came out in October of 2022. At that time as referenced in the article FF rates were expected to be at 4.4% to no more than 4.9% by end of 2023. Who would have guessed that they would be at 5.25% to 5.5%
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Post by yogibearbull on Sept 25, 2023 21:10:36 GMT
Looking at 3m T-Bill, the daily (EOD) rates have been 5.5x% since late-July, and last 4 3m T-Bill auctions were priced at 98.65xxxx (so, 3m TR 5.4x%). So, one may say, what rate rise? None on the short end despite that is what the Fed controls most via overnight fed fund rates.
All T-Bill/Note yields up to 2 yrs are now above 5%.
Much of the rise has been in longer maturities. Some may call it yield-curve flattening, I have called this yield-curve pivoting around the short end. This may continue to hurt bond funds (taxable, munis) for a while longer.
BTW, there was news today that on government shutdown, the last holdout Moody's/MCO (Warren Buffett/BRK owns 13.45%) may also downgrade the US debt and join the other 2 (S&P, Fitch).
So, things are definitely changing in the bond market.
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