Broad Sentiment Poll For The Rest Of 2024

[steadyeddy]

BBers,

Just a temperature check of the members.. Hopefully very simple to pick one of the four choices to capture your sentiment/mood for the rest of 2024...

Thanks for participating in advance.

Eddy

[racqueteer]

I'd be interested in the thinking behind the bullish on bonds vs. stocks position. I could hazard a guess, but would anyone care to clarify their thinking for the audience?

[Chahta]

Long term I am always "bullish" on equities. History has proven that. Bonds, as a group, are depressed in price now. Alway better to buy low, especially bond funds. RSIIX, CBLDX, OSTIX have made money for me the last 1 1/2 years. Of course they are shorter term funds less affected by the 10-year rate. I want the income so having a low-cost basis and more shares is important.

Seems prevalent here that bonds are only worth buying once rates start declining. Why would anyone buy a bond fund at higher prices? Once rates start declining the sweet spot has been missed.

[racqueteer]

Ok... So buying in anticipation of lower rates and appreciation of the existing bond holdings? Buying now to take advantage of the lower prices, but ultimately, a bet on rates dropping sometime this year?

[retiredat48]

Apr 24, 2024 13:36:51 GMT Chahta said:

Long term I am always "bullish" on equities. History has proven that. Bonds, as a group, are depressed in price now. Alway better to buy low, especially bond funds. RSIIX, CBLDX, OSTIX have made money for me the last 1 1/2 years. Of course they are shorter term funds less affected by the 10-year rate. I want the income so having a low-cost basis and more shares is important.

Seems prevalent here that bonds are only worth buying once rates start declining. Why would anyone buy a bond fund at higher prices? Once rates start declining the sweet spot has been missed.

Generally plus 1..

Along these lines, I posted often why I considered the big whole number of 5% would be a top for ten year treasuries,  and resist going higher for treasury bonds.  Also suggested those desiring to buy, front run this number, buying at 4.90% to 4.99%.  (Bond prices rise as rates fall).

This happened exactly.  Ten year went to just above 5% for about an hour; then large buying came in.

I consider same may occur again.  5% on ten year will be a tough nut to crack.  Portfolios of a variety of institutions and investors do very well (survival) with the FI allocation getting 5% LONG TERM from safest of investments.

R48

[keppelbay]

bullish on bonds:
I think the mkt concern about inflation is excessive. The amount by which the recent 'shock' exceeded expectations was rather small. So, I expect the fed to cut, perhaps by more than the market is currently pricing in. I leave taking a strong forward view and acting on it to my bond fund managers (at Pimco). I also think that equities are looking fragile after the strong runup, so my 'gut' is that there is more downside risk for equity at present vs the upside opportunity cost of being out (or light) on equity.

[Chahta]

Apr 24, 2024 14:11:43 GMT racqueteer said:

Ok... So buying in anticipation of lower rates and appreciation of the existing bond holdings? Buying now to take advantage of the lower prices, but ultimately, a bet on rates dropping sometime this year?

No, not a bet they drop this year. A bet they go down in the future. For me I do not need to use the yield right now. So more shares bought low jacks up future income and drops cost basis. Also makes a CG more likely. For me if I have a bond fund bought at $10 and it remained at $10 forever I am happy. I have spent the yield in the mean time. I have never viewed bond funds as a major CG situation.

It’s something I am comfortable with. I just don’t get timing bond fund buys. We all know the pros are not good timers either.

[fishingrod]

Apr 24, 2024 17:54:49 GMT Chahta said:

Apr 24, 2024 14:11:43 GMT racqueteer said:

Ok... So buying in anticipation of lower rates and appreciation of the existing bond holdings? Buying now to take advantage of the lower prices, but ultimately, a bet on rates dropping sometime this year?

No, not a bet they drop this year. A bet they go down in the future. For me I do not need to use the yield right now. So more shares bought low jacks up future income and drops cost basis. Also makes a CG more likely. For me if I have a bond fund bought at $10 and it remained at $10 forever I am happy. I have spent the yield in the mean time. I have never viewed bond funds as a major CG situation.

It’s something I am comfortable with. I just don’t get timing bond fund buys. We all know the pros are not good timers either.

I agree on the, 'in the future.

I would much rather have a capital gain on my bond purchases, rather than a loss. So if you call that timing, Yes.

A lot of the pain has already been felt. SEC ylds are up on bond funds, especially Treasury heavy funds.

Great time to start establishing a position to be a safer component of a portfolio. 

[steadyeddy]

It is hard to pass up the yields we are getting on safe bonds these days. I am buying more on days that have drawdown on bonds.

[fishingrod]

This is not to say one may not have declines on paper for a while, especially at this time in the FED cycle.

So many people on the fence, and going back and forth.

Even if the FED rate goes up from here I don't think it is a bad time. Overtime it will work itself out.

At least one is getting paid these days, unlike four years ago when the Ten year was at .50%

Today it is at 4.64% 

That is a good buffer.

[steelpony10]

     This isn’t Stagflation yet but maybe….. that’s why higher rates longer may be the best course.

      As far as the OP short term is always a crapshoot and the future unknown.

      Here’s what I experienced long, long ago until I found my way out:

       www.winvesta.in/blog/what-happens-to-the-markets-during-stagflation#:~:text=Analysts%20ask%20investors%20to%20adopt,rising%20inflation%20is%20a%20dampener.

[Birdman96]

I’m bullish on individual treasury bills, notes and tips held to maturity, having moved most of the investment grade bond funds to ‘em. I like knowing how much income is coming in for RMDs. They don’t necessarily say, “bullish” but I’m looking to hit singles and doubles, not swingin’ for the fences.

[catdog]

Bullish on Bonds was the best choice I could come up with. More accurate would be bullish on bonds by next year or slightly beyond. My plan is to add to FBND when the 10year spikes. I have done it once already. My original buy was in October

catdog

[gman57]

I can understand why we think 5% on the 10yr might be the top ** BUT** the 10yr was over 6% for ~25 years (over 10% for 6 of those years!) during the late 60's -> early 90's.

You say this time is different? Maybe, maybe not... You would think the strain of that high of an interest rate and what that would do to our annual debt payments would be enough to never let that happen. Most likely... but don't bet the farm.

[steadyeddy]

Bullishness on bonds and stocks are neck-n-neck at 6 votes each! Wow! This poll is more interesting than I thought.

Also interesting is no one is bearish on bonds... perhaps that might prove to be the winner if contrarian bet is correct?

[retiredat48]

Apr 25, 2024 1:49:51 GMT steadyeddy said:

Bullishness on bonds and stocks are neck-n-neck at 6 votes each! Wow! This poll is more interesting than I thought.

Also interesting is no one is bearish on bonds... perhaps that might prove to be the winner if contrarian bet is correct?

I wanted to post BOTH Bullish on stocks and bullish on bonds...but couldn't do it by poll setup.

R48

[retiredat48]

Apr 24, 2024 23:47:04 GMT gman57 said:

I can understand why we think 5% on the 10yr might be the top ** BUT** the 10yr was over 6% for ~25 years (over 10% for 6 of those years!) during the late 60's -> early 90's.

You say this time is different? Maybe, maybe not... You would think the strain of that high of an interest rate and what that would do to our annual debt payments would be enough to never let that happen. Most likely... but don't bet the farm.

I think the poll was only projecting to end of year.

And why stop at 10%.  Treasuries got above 15% in 1970's.

Sure...historically treasury rates have been higher; but usually takes years for major changes.  Fact is bonds go in sine wave cycles while moving to different rate levels. Fed will likely lower short rates at least a little, thus limiting 10 yr current rise.

BTW The large up/down bond cycles are about 33 years in length, peak to bottom.

R48

[oldskeet]

Old_Skeet is currently, for year end, bullish on both stocks and bonds with the better returns coming from stocks if there is no major geopolitical event taking place.

[steadyeddy]

Apr 25, 2024 4:40:51 GMT retiredat48 said:

Apr 25, 2024 1:49:51 GMT steadyeddy said:

Bullishness on bonds and stocks are neck-n-neck at 6 votes each! Wow! This poll is more interesting than I thought.

Also interesting is no one is bearish on bonds... perhaps that might prove to be the winner if contrarian bet is correct?

I wanted to post BOTH Bullish on stocks and bullish on bonds...but couldn't do it by poll setup.

R48

Noted the point about one choice to pick. However, my idea was to get a high conviction sentiment - thus the single choice.

[steadyeddy]

Apr 25, 2024 4:47:12 GMT retiredat48 said:

Apr 24, 2024 23:47:04 GMT gman57 said:

I can understand why we think 5% on the 10yr might be the top ** BUT** the 10yr was over 6% for ~25 years (over 10% for 6 of those years!) during the late 60's -> early 90's.

You say this time is different? Maybe, maybe not... You would think the strain of that high of an interest rate and what that would do to our annual debt payments would be enough to never let that happen. Most likely... but don't bet the farm.

I think the poll was only projecting to end of year.

And why stop at 10%.  Treasuries got above 15% in 1970's.

Sure...historically treasury rates have been higher; but usually takes years for major changes.  Fact is bonds go in sine wave cycles while moving to different rate levels. Fed will likely lower short rates at least a little, thus limiting 10 yr current rise.

BTW The large up/down bond cycles are about 33 years in length, peak to bottom.

R48

Considering the debt levels of sovereigns and corporates, I personally do not see rates going to 15% at any spot in the yield curve.

I am not an expert but the Fed will invent new schemes to maintain yield curve control. After the GFC, the Fed is squarely in the middle of market manipulation for the benefit of of asset price stabilization.

[steadyeddy]

Apr 25, 2024 7:57:56 GMT oldskeet said:

Old_Skeet is currently, for year end, bullish on both stocks and bonds with the better returns coming from stocks if there is no major geopolitical event taking place.

Second term presidency - regardless of whose second term it is - will could be construed as a geopolitical event. Just a few months away. Demented or deranged, pick your poison.

[johntaylor]

Even though the Uniparty in Congress is sending billions more in inflationary spending to our 51st state of Ukraine (plus Israel and Taiwan), the Fed may be closer to a cut. 

In One Up on Wall Street,  Peter Lynch mentioned that some amount of optimism was a necessary part of the psychology of a stock investor.

[Norbert]

Hmmm. Core inflation is a high 3.8% and GDP fell last quarter. Not a pretty combination.

Given stock valuations and an administration unfriendly to business; two uninspiring presidential candidates plus an already high federal deficit ... a man could be forgiven for feeling bearish on stocks.

[johntaylor]

Re the atmosphere for business, the (no kidding) "Climate Corps":

"...a new, diverse generation of more than 20,000 Americans...conserving and restoring our lands and waters, bolstering community resilience, deploying clean energy, implementing energy efficient technologies, and advancing environmental justice..."

[howaya]

Apr 25, 2024 13:45:11 GMT Norbert said:

Hmmm. Core inflation is a high 3.8% and GDP fell last quarter. Not a pretty combination.

Given stock valuations and an administration unfriendly to business; two uninspiring presidential candidates plus an already high federal deficit ... a man could be forgiven for feeling bearish on stocks.

I do not see this administration as unfriendly to business.  The Inflation Reduction Act and The Chips Act both throw billions of dollars toward businesses.  I am sure there are other instances as well but those two example were what came to my mind immediately.  They were nationally strategic moves and those long term commitments influenced several of my stock and ETF purchases over the past 24 months from an unacceptably high level of MM holdings.

As for GDP, it didn't fall at all.  It did grow at a slower pace than several previous quarters, though.  The higher interest rates did not impair capex of those businesses already awash in cash but the perception of hardship across the board may now influence their valuations in the short term.  If those businesses take a temporary breather, so be it.

[Capital]

I'd like to ask that we get off the politics here before this board gets trashed. I know it just so easy to stray.
There are three colors on the US flag. My favorite is the white. 

[steadyeddy]

The Fed needs something, anything, anything at all to consider lowering ST rates... and so far they are not getting much. June cut is probably out, which means September at the earliest? Is that what the proverbial tea leaves showing?

[Chahta]

But wait, isn’t lowering GDP called “recession”? I realize recession is 2 quarters in a row of negative GDP growth. This is what the Fed was trying to do.

[archer]

Apr 26, 2024 1:03:14 GMT Chahta said:

But wait, isn’t lowering GDP called “recession”? I realize recession is 2 quarters in a row of negative GDP growth. This is what the Fed was trying to do.

Lowering GDP should be called a receding. Then after 2 qtrs, a recession.  

[retiredat48]

Apr 26, 2024 1:03:14 GMT Chahta said:

But wait, isn’t lowering GDP called “recession”?

R48 reply in bold: No.  A reduction in GDP, but still positive, is not a recession.  Your next sentence is the definition, AFAIK.

I realize recession is 2 quarters in a row of negative GDP growth. 

R48 reply: Yes.