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Post by yogibearbull on Jul 7, 2021 2:01:09 GMT
There is trading-around-core-position and that isn't considered market timing (fully in or out). So, one takes some money off the table when position moves higher, and adds some when position moves lower, always maintaining decent core position. As EDV price approaches 200-dMA with RSI already high, anything can happen - from rally failure at 200-dMA, to breakout well above 200-dMA, to sideways move. stockcharts.com/h-sc/ui?s=EDV&p=D&yr=1&mn=0&dy=0&id=p37537843539
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Post by paulr888 on Jul 9, 2021 4:44:46 GMT
Helmut ... You never got back to me so I am going to answer my own question. I started establishing my long (30yr US Treasuries) bond position earlier this year when the 30 yr rate was in the 2.1% to 2.4% range. I have an unrealized cap gain since then. I was considering selling maybe half. But I am realizing if I sell, I likely won't get a decent buy back price before the risk of a plunging 30yr that I am trying to protect against comes to fruition. So I've convinced myself to keep my half target position and let it play out. There is a chance I will lose money in short run as rates temporarily rise but have the position in case a contrarian like David Rosenberg is right in forecasting a huge rally in the long bond over the next 12 months. And Scott Minerd's forecast is for a rate trough in early 2022 that could get pretty ugly. In hindsight, I should have ignored the majority opinion that rates were only going higher and buying the long bond was stupid. I should have embraced my stupid self and established my full target position.
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Post by Chahta on Jul 9, 2021 12:04:06 GMT
"contrarian like David Rosenberg is right in forecasting a huge rally in the long bond over the next 12 months"
Just to be clear, this is a rally in price as yields fall? It is hard to imagine the long bond going a lot lower.
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Post by paulr888 on Jul 9, 2021 13:09:25 GMT
Yes, the contrarians are forecasting yields going down, down, down and prices going up, up up. That is why I don't think one needs a lot of long bonds to benefit if that scenario happens. Sometimes the unimaginable happens. Some people believe just when the crowd is saying something must happen then there is high probability just the opposite will occur. I want an all bases covered portfolio where I get a little long bonds myself and get some assistance from funds like ANBEX that has long bonds and GIBLX that historically has added long bonds opportunistically. I consider this cheap insurance. It is not a heavy bet for me. Even fan favorite FMSDX had about 10% long bonds when I checked several months ago. I know most people think this is stupid and as Helmut said we are subject to ridicule. I am OK with the crowd calling me stupid.
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Post by anitya on Jul 9, 2021 19:04:58 GMT
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Post by paulr888 on Jul 9, 2021 19:54:21 GMT
This is the consensus opinion. She could be right.
On the other hand I have a list of people that are also knowledgeable who forecast rates going down and/or profess a strategic allocation to the long bond is prudent for a portfolio. My list is:
Jeffrey Gundlach Scott Minerd Sebastien Page David Rosenberg Precedence Wealth (via videos I have posted)
The above guys could be right. Who really knows. Again, I am not talking about a major allocation to the long bond. My target, that Sebastien Page uses for his portfolios, is 3% to 5% of PV.
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Post by anitya on Jul 10, 2021 1:02:58 GMT
paulr888, I am surprised Gundlach name is at the top of your list predicting long bond rates to go down. His deputy today had a different tone, which I thought has been a consistent talking point out of DoubleLine - youtu.be/00AYlQ4vK8EYou have to develop your own radar for who is more likely right - everybody is playing the probabilities game - some people are more biased / less objective than others. Also, some shops talk but do not make the bets they talk. A
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Post by paulr888 on Jul 10, 2021 2:45:05 GMT
Hi anitya .... Notice the "and/or" in my statement. Rosenberg and Minerd are predicting that. Gundlach, Page and Precedence Wealth are suggesting long bonds as a strategic hedge for a portfolio. Regarding Gundlach, in his 1/1/21 "Just Markets" annual presentation he suggested a version of the Permanent Portfolio with 25% in 30 year US Treasuries. He mentioned he would probably lose money in the short run on that portion. When I posted that elsewhere, someone responded why would anyone invest in something they knew would be a loser. Why? Probably because a Permanent Portfolio performed well last year and maybe will perform well for a 5 year horizon or so. A well constructed portfolio is not consisted of assets that all go up all the time.
I am not trying to decide who is right or who is wrong. I am trying to identify risks that have good probability of occurring and construct a portfolio accordingly. I have concluded Inflation and Deflation have enough probability that I want to address. Long bonds are the best antidote to Deflation.
Edit: I listened to video. Thanks for posting. This is consistent with what has been coming out of DoubleLine last couple of months, reduce/shorten duration as a tactical move. But I say with extreme confidence if you were to ask Mr. Sherman whether he believes a portion of long US Treasuries is a prudent strategic addition to a diversified portfolio, he would say Yes. Even though you can't buy that from DoubleLine. I have heard Mr. Sherman say as much in other videos as well as in a fund webcast where he specifically answered my question. I explored further at the time and came up with WHOSX for a mild play and another more juice play with all 30 yr Zero Coupon Treasury Bonds, ZROZ. Some people also use EDV.
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Post by anitya on Jul 11, 2021 8:26:43 GMT
I have learned that I am not very good at anticipating anything.
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Post by paulr888 on Jul 11, 2021 12:46:01 GMT
Neither am I anitya. And I don't fool myself that I am some great prognosticator. But I am a sponge for absorbing information and I am willing to spend tlme to listen to people who are a lot smarter than me and learn from them. My sources of information are:
- DoubleLine's focus since the pandemic to educate its investors and others on how to construct portfolios. I listen to the fund webcasts. They also have constant guests with conferences and interviews where they share a lot of good information.
- Pimco website offers me webcasts and articles. Not as good for me as DoubleLine.
- Consuelo Mack on Wealthtrack has weekly interviews that are very informative.
- Paul Merriman has weekly podcasts.
- I follow twitter of Jeffrey Gundlach, Scott Minerd and David Rosenberg. Get lots of good info for free.
- CNBC and Bloomberg TV offer good info at times.
- I follow Fidelity forum and Big Bang forum. When I see someone recommending a fund I am not familiar with, I research it and determine where it would fit in my portfolio and if it is better than what I may already have there.
The above provides me with an abundance of information that I have absorbed over the years that have helped me be a better investor and has improved my portfolio. For that I am grateful.
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Post by paulr888 on Jul 14, 2021 15:53:35 GMT
I saw a Bloomberg video today with Steven Major. Add him to the David Rosenberg camp on deflation risk. What can support deflation: debt load, aging demographics that spend less, technology advances (Moore's Law creating faster and cheaper), stagnant wages. Food for thought. To remind, I am not saying this will happen. I am saying I believe it is not a risk to be ignored for me in my goal of designing an "all bases covered" portfolio. My goal is 3% to 5% PV in the long bond (US 30 yr Treasuries), just like my 3% to 5% PV in gold exposure. Some investors like Helmut want more. If that is his comfort level, that's what it should be. Long term he has done well and he knows about cycles and how to rebalance and take profits. YMMV. www.bloomberg.com/news/videos/2021-07-14/hsbc-s-major-says-yields-peaked-at-the-end-of-march-videoEdit: Add Cathie Wood to the deflation camp. www.youtube.com/watch?v=6E0tpDmeHRs
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Post by FD1000 on Jul 15, 2021 19:53:53 GMT
This is my problem with many bond comments 1) "What is the thinking?"...FD: it depends a lot on your goals, risk tolerance and style. 2) "I have been advocating against holding longer duration bond funds for past couple years"...FD: history shows that TLT made 28.5% in the last 3 years and protected your stocks exactly when you needed them during March 2020. 3) "I've been buying long-term treasuries in one form or another since 2002 with the same warning signs for the last 19 years from other posters"....FD: That statement is correct 4) "VBILX/BIV was far and away my best performer in 1Q2020, but it started to slide in the 2H. I took a few lumps and got out. Shortly thereafter I sold PIGIX, and moved all FI into VUSFX (Ultrashort) except DODIX and whatever is inside Wellesley VWIAX and Global Wellington VWAGX." FD: that was a good trade. Have you been a trader and are you going to do that in the future. A good trader actually bought HY Munis and did a lot better than DODIX. 5) "Just like ST bonds, LT bonds have a place in portfolio."...FD: it all depend on goals, risk tolerance and style but also what % are you going to invest. Do you own 15 funds? is it 20% or 3% 6) "Regardless of intervening price points, bonds, excepting defaults, will return an exact amount stated in the bond, at maturity."...FD: not all bond are treasuries. There is a wide range between treasuries to munis, HY and all the way to FI CEFs. 7) "I would be careful about projecting forward annualized returns from the last decade."....FD: very likely correct 8) "I have to say that it usually takes me around 1.5 to 2 years to really realize a good bond position."...FD: generic observation after I have been following and trading funds. Either you are faster or much longer trader, I find the 1.5-2 years actually too late and/or changing on the wrong time. 9) "While I sold off most IT / LT government bonds last year in the form of BIV / VBILX / FXNAX, I still have (and have added to) LT municipal bonds (VWLUX, VWALX)."...FD: a better trade than the above. 10) "I might considering partial sells and partial rebuying into a rising long bond RATE. But this is market timing."...FD: market timing does work. How long have you been doing it and how successful? 11) List of experts..FD: Gungalch used to be the king of bond, but the king doesn't have clothes for years. He missed the boat by several miles predicting the 10 years treasury will be at 6%. Scott Minerd is pretty good and I would recommend GIBLX for a long hold. Sebastien Page, I heard several interviews, lots of fluff, little actions what exactly you need to do currently in different periods. David Rosenberg? not even close. Precedence Wealth? never heard them. Pimco web site? not bad. In most cases MBS is highly recommended while PIMIX is far from being a top fund.
So, I look at all the above and I come with: 1) Again, goals and style. If you know exactly what you want/need and can quantify it, the solutions can be easier. I don't believe in generics. 2) Many retirees want to own bonds. There is no other option and buying more stocks or alternatives it's not a good choice. 3) If someone own 3% in a fund it's not a convincing argument, I want to see at least 10% or at least 10% in more funds with very close assets. 4) Trading and timing works but is this what you want? I use it a lot. I find selling to cash only at high risk market to be a better protection for investors close to retiremt and beyond if you do it correctly.
For generic bond funds starts with DODIX,GIBLX,ANBEX. All are in the core plus category with more flexibility.
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Post by xray on Jul 15, 2021 21:08:38 GMT
Your:So, I look at all the above and I come with: 1) Again, goals and style. If you know exactly what you want/need and can quantify it, the solutions can be easier. I don't believe in generics. 2) Many retirees want to own bonds. There is no other option and buying more stocks or alternatives it's not a good choice. 3) If someone own 3% in a fund it's not a convincing argument, I want to see at least 10% or at least 10% in more funds with very close assets. 4) Trading and timing works but is this what you want? I use it a lot. I find selling to cash only at high risk market to be a better protection for investors close to retiremt and beyond if you do it correctly. ----- 1... Agree totally, but I also believe that our " excel worksheets" must also define our goals, objectives, style, and knowledge [through "lessons learned"]. In addition, it should be designed for buying/selling assistance to help us make the necessary decisions without the emotion and fire drills.... 2... Not really [IMHO]. A lot of us retiree's want to own "undervalued" securities with undervalued dividends We are "CapGains" oriented [total return]. Some of us are experienced with CEF's with their "specified" discounts known [undervalued identification] that have Managers performing well with many different securities within their portfolio's. Bottom line, with CEF's, we are studying/buying the "Managers Performance" and not the CEF's by studying the different Managers performance over the last few week's/month's and not years where markets [and managers] are always changing [IMHO].... 3... Some of us were taught to [in our older college days] to invest "slowly" [0-2% of portfolio for initial buying], and then adding "2%" in increments [up] to a maximum of 6% for those securities that perform well [going forward]. Over time, and lessons learned, the 6% can grow a little more. Some of us have approached the 10% you talk about but we realize that [1] we have added a "lot" of more "RISK" to our portfolio and [2] that markets can change more quickly than we want. In addition, we were taught to always have 16 different securities in our portfolio's as a minimum [to reduce our overall risk].... 4... I don't believe many of us are equipped/trained well enough to "time the market" for buying and selling. Some of us who buy into the market [with very careful analysis] do not buy to buy/sell in the short term but look to the longer term for collecting CapGains along with our dividends. This has worked out well for many of us. We sell when our [designed] excel worksheets tell us to. We also add additional shares by reviewing our excel worksheets like you probably do....
Currently, many of us retiree's have reached our Goals and Objectives for the year [took all of our remaining CapGains for the year] and are now sitting with our current portfolio's [on the sidelines since 7/9] and receiving our dividends each month/Qtr. Our intent is not to sell anything [unless forced to] for the remainder of the Qtr. Hopefully, our portfolio's are designed for the up/down changing markets and a reduction of the dividends [in a extensive down market] of not more than -2%....
One single opinion of the many I am sure.... Live Long and Prosper....
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Post by ignatz on Jul 15, 2021 21:55:11 GMT
We sell when our [designed] excel worksheets tell us to.
Please advise details. I assume this relates to formulas and calculations of some type that provide a mechanical signal.
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Post by chang on Jul 15, 2021 22:12:56 GMT
Currently, many of us retiree's have reached our Goals and Objectives for the year [took all of our remaining CapGains for the year] and are now sitting with our current portfolio's [on the sidelines since 7/9] and receiving our dividends each month/Qtr.
Greetings Eddie. Please don't take this as a "drive-by shooting", but I often see a remark like the one excerpted above, and I take exception to it. For the same reason I eschew "YTD" stats. There's nothing special about the dates 1/1 and 12/31. If your annual goal is 6% and you've hit that by June 30th, why go on vacation for the next six months? I know one guy who brags about hitting his meager annual goal of 4-6% every year, but wouldn't it better to have made 30-40%+ like many of us did in 2020, banking a profit that allows for an off-year or two? Double your goal ... then you can take a real vacation. I know I'm reading too much into this, but I don't think the expression "I've already reached my goal for the year..." makes much sense. Whatever you do, why not do it all the time? Presumably everyone has an approach that directly or indirectly reflects goals and tolerances that produce a risk-adjusted return that they are happy with. So what magically happens on June 30th? Or August 19th? Or November 10th? Or December 28th? I realize that "YTD" stats sound interesting, but in truth they are much less useful than 6M or 1Y stats, because they apply to an arbitrary and changing period. My 2c.
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Post by paulr888 on Jul 16, 2021 0:29:36 GMT
I agree with you Chang. I have 2 co-equal goals: generate 4% portfolio yield and keep tight to my AA. That's it so I am always in the market and I don't set any annual total return goals.
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Post by FD1000 on Jul 16, 2021 1:49:26 GMT
Your:So, I look at all the above and I come with: 1) Again, goals and style. If you know exactly what you want/need and can quantify it, the solutions can be easier. I don't believe in generics. 2) Many retirees want to own bonds. There is no other option and buying more stocks or alternatives it's not a good choice. 3) If someone own 3% in a fund it's not a convincing argument, I want to see at least 10% or at least 10% in more funds with very close assets. 4) Trading and timing works but is this what you want? I use it a lot. I find selling to cash only at high risk market to be a better protection for investors close to retiremt and beyond if you do it correctly. ----- 1... Agree totally, but I also believe that our " excel worksheets" must also define our goals, objectives, style, and knowledge [through "lessons learned"]. In addition, it should be designed for buying/selling assistance to help us make the necessary decisions without the emotion and fire drills.... 2... Not really [IMHO]. A lot of us retiree's want to own "undervalued" securities with undervalued dividends We are "CapGains" oriented [total return]. Some of us are experienced with CEF's with their "specified" discounts known [undervalued identification] that have Managers performing well with many different securities within their portfolio's. Bottom line, with CEF's, we are studying/buying the "Managers Performance" and not the CEF's by studying the different Managers performance over the last few week's/month's and not years where markets [and managers] are always changing [IMHO].... 3... Some of us were taught to [in our older college days] to invest "slowly" [0-2% of portfolio for initial buying], and then adding "2%" in increments [up] to a maximum of 6% for those securities that perform well [going forward]. Over time, and lessons learned, the 6% can grow a little more. Some of us have approached the 10% you talk about but we realize that [1] we have added a "lot" of more "RISK" to our portfolio and [2] that markets can change more quickly than we want. In addition, we were taught to always have 16 different securities in our portfolio's as a minimum [to reduce our overall risk].... 4... I don't believe many of us are equipped/trained well enough to "time the market" for buying and selling. Some of us who buy into the market [with very careful analysis] do not buy to buy/sell in the short term but look to the longer term for collecting CapGains along with our dividends. This has worked out well for many of us. We sell when our [designed] excel worksheets tell us to. We also add additional shares by reviewing our excel worksheets like you probably do....
Currently, many of us retiree's have reached our Goals and Objectives for the year [took all of our remaining CapGains for the year] and are now sitting with our current portfolio's [on the sidelines since 7/9] and receiving our dividends each month/Qtr. Our intent is not to sell anything [unless forced to] for the remainder of the Qtr. Hopefully, our portfolio's are designed for the up/down changing markets and a reduction of the dividends [in a extensive down market] of not more than -2%....
One single opinion of the many I am sure.... Live Long and Prosper....
You are talking about your own specific situations, while I'm talking generics. I have my own unique system which works fantastic for our goals. 1) Most investors don't use spreadsheet for trading and shouldn't trade much 2) Most retirees use bonds not CEFs which are suited more for traders. 3) Most books/articles are talkig about simple portfolio, not 30-40 holdings, buying small portions. You should know your goals and risk tolerance, set a proper asset allocation and stick to it with minimal trades. Research/analysis shows that most who used the above beat most others. 4) Many should not time the market or sit out. Why generic are more important? because more investors fall under it, and it's easier to implement it. I know a couple with a pension + SS at $27K monthly. They can do whatever they want, but they are not your typical retiree. BTW, I never used spreadsheet or any software to track my trading, portfolio, and budget because our discount broker and bank have all that info and our portfolio always had small number of funds. I believe that you should use your best ideas per Buffett ""diversification is protection against ignorance" ======== Yearly goals:I love to meet my yearly goal but after I do I don't change much and try to make more.
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Post by chang on Jul 16, 2021 2:28:00 GMT
You are talking about your own specific situations, while I'm talking generics. I have my own unique system which works fantastic for our goals. Er, that's quite a contradiction!
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Post by FD1000 on Jul 16, 2021 3:44:43 GMT
You are talking about your own specific situations, while I'm talking generics. I have my own unique system which works fantastic for our goals. Er, that's quite a contradiction! Nope. I only mentioned my system but no specifics and then posted generic comments.
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Post by paulr888 on Jul 16, 2021 14:21:53 GMT
LOL. I never hear someone say they are speaking "generically" so much. I am not even sure I know what it means in the context of a discussion group. Most people just speak and give honest opinion or advice. Seems to me the only use of generically speaking is when one wants a built in excuse in case one is wrong. Glad this condition is rare. Otherwise, my head would constantly be spinning trying to ascertain the generics from the specifics.
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Post by xray on Jul 16, 2021 15:51:02 GMT
chang, Your: Currently, many of us retiree's have reached our Goals and Objectives for the year [took all of our remaining CapGains for the year] and are now sitting with our current portfolio's [on the sidelines since 7/9] and receiving our dividends each month/Qtr. Greetings Eddie. Please don't take this as a "drive-by shooting", but I often see a remark like the one excerpted above, and I take exception to it. For the same reason I eschew "YTD" stats. There's [1]...nothing special about the dates 1/1 and 12/31. [2] If your annual goal is 6% and you've hit that by June 30th, why go on vacation for the next six months? I know one guy who brags about hitting his meager annual goal of 4-6% every year, but wouldn't it better to have made 30-40%+ like many of us did in 2020, banking a profit that allows for an off-year or two? 1... There's nothing special about the dates 1/1 and 12/31 [Answer] There is in my world. We use those dates, we can monitor our "performance" year to year. In addition "ROC" has no meaning until 12/31....
2... If your annual goal is 6% and you've hit that by June 30th, why go on vacation for the next six months? [Answer] First of all some of us retiree's have a "yearly] goal of 15% [10% dividends, 5% capGains]. Some of us "LOCK IN" our CapGains [can't lose what we have already taken] by sitting out the market [with some exception] and not selling anything that has a CapLoss [attached to it]. The thinking here is that if we bought a "good undervalued" security" [with a very careful analysis] and we shouldn't be ready to give it up for any short term declines. Many of us do not like sine wave markets [up/neutral/down/neutral/up etc] where only the traders and hedge fund managers win.... 3... Wouldn't it better to have made 30-40%+ like many of us did in 2020, banking a profit that allows for an off-year or two? [Answer] Many of us keep track of our year to year performances [since 12/2013]. We have done pretty well over many years now. Last year we finished with 46.8% in Div & CapGains. This year we are "locking in" 40.5% in Div & CapGains. 2017, 2018 and 2019 were the problem years. In 2017, we made 61.7%, 2018 -14.1%, and 2019 26.1%. Many of us do not like making CapGains and then giving them back. Were want to Lock in the gains and make them permanent....
4... I know I'm reading too much into this, but I don't think the expression "I've already reached my goal for the year..." makes much sense. Whatever you do, why not do it all the time? Presumably everyone has an approach that directly or indirectly reflects goals and tolerances that produce a risk-adjusted return that they are happy with. So what magically happens on June 30th? Or August 19th? Or November 10th? Or December 28th? [Answer] Reaching our goals and objectives is a excel worksheet decision where the current data does not reflect a good market to invest in [no longer undervalued]. We don't want to get greedy. Our portfolio generates 9.28% of dividends currently [until the end of year] and we have "locked in" our Capgains. We don't really care what those future dates [going forward] mean since our portfolio should be within our current "Risk Tolerances" and will be going up/down with the market....
5... I realize that "YTD" stats sound interesting, but in truth they are much less useful than 6M or 1Y stats, because they apply to an arbitrary and changing period. [Answer] 6M and 1Y are meaningless in my world of analysis. Those years you define are looking back into the rear mirror and not looking forward to the "current" ever changing period [what do we believe is happening]....
No offense intended [just a different analytical view of evaluating the market going forward].... ... Double your goal ... then you can take a real vacation. I know I'm reading too much into this, but I don't think the expression "I've already reached my goal for the year..." makes much sense. Whatever you do, why not do it all the time? Presumably everyone has an approach that directly or indirectly reflects goals and tolerances that produce a risk-adjusted return that they are happy with. So what magically happens on June 30th? Or August 19th? Or November 10th? Or December 28th? I realize that "YTD" stats sound interesting, but in truth they are much less useful than 6M or 1Y stats, because they apply to an arbitrary and changing period. My 2c.
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Post by xray on Jul 16, 2021 16:06:05 GMT
Ignatz,
Your: Please advise details. I assume this relates to formulas and calculations of some type that provide a mechanical signal.
Sell codes are used in my excel worksheets for each security in portfolio. Elaborate excel worksheets can not be expressed enough for any investor investing in the market. With that said....
Sell codes in our excel worksheets compare the current bi-weekly NAV's/MktPrc's to:
intrinsic values numb3r NAV crash price projection numb3r Report card Grading numb3r Power Ratings numb3r Star Ratings numb3r 13wk star ratings numb3r Risk Factor [Rf] numb3rs Average MktPrcCost price numb3r dividend % number projected Div numb3r
Hope this helps a little.... Live Long and Prosper....
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Post by rhythmmethod on Jul 19, 2021 14:02:09 GMT
Assuming this thread is still about EDV/TLT, EDV added about 2.5% so far. helmut, while too polite to gloat, might have reason to.
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Post by paulr888 on Jul 19, 2021 14:05:26 GMT
I envy Helmut. I was snoozing over the years while he was making money. I am sure he is loving his 30 yr Zero Coupon Treasury bonds.
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Post by helmut on Jul 20, 2021 2:53:59 GMT
Assuming this thread is still about EDV/TLT, EDV added about 2.5% so far. helmut , while too polite to gloat, might have reason to. You two ( paulr888), are too kind and yes today was EDV's day in the sun. Tomorrow will be another day so I'm not going to brag because I have had some years when LT Treasuries were lost in the wilderness. While EDV saved me today my RPV was in the tank, even so my portfolio was only 7 basis points in the red today. It could have been much worse. helmut
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Post by rhythmmethod on Aug 2, 2021 17:20:59 GMT
A question for long term holders of EDV, TLT - Have you ever noticed that its price foretells anything about future equity action? Today equities are sluggish, but still up. EDV is up well over 1%. I'm speculating if that might be any indication of an equity downturn. Or, perhaps, they move independently on their own tracks. helmut, paulr888,
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Post by paulr888 on Aug 2, 2021 19:00:50 GMT
A question for long term holders of EDV, TLT - Have you ever noticed that its price foretells anything about future equity action? Today equities are sluggish, but still up. EDV is up well over 1%. I'm speculating if that might be any indication of an equity downturn. Or, perhaps, they move independently on their own tracks. helmut , paulr888 , Sorry RM I don't have an answer for you. I only learned about value of adding long bond to portfolio earlier this year when the 30 yr Treasury was over 2% and it seemed like a good time to start adding but I only got 1/2 my target allocation when the long bond rallied and I am not buying at these prices. So I have limited experience. I hope Helmut sees this and responds. If I had better analytic skills I would try to plot EDV vs SPX but I don't know how to do that.
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Post by yogibearbull on Aug 2, 2021 19:22:16 GMT
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Post by paulr888 on Aug 2, 2021 22:07:12 GMT
Thanks for the chart YBB. Would you help me read the chart to see whether it confirms my intent or not. The reason I would add a long bond like EDV is to protect stock market volatility. When the stock market is bottoming like from Feb 1 2020 to March 1 2020 I would want EDV to be rallying, with price at a peak level at that time or shortly thereafter. Can you tell me if that is the case? The theory is to rebalance EDV as it gains in price, selling some gains back down to your target %. I understand the other edge of the sword. The downside is when stock market is trending up, EDV is not rallying, with price trending down. I think that is what you are referring to by the long painful decline. This would create a buying opportunity to get back to target allocation. Does this make sense to you? Thanks for helping me on this. It is a new venture for me this year. While I have your attention, would you also comment on something else I am up to now. After listening to Artemis Capital discussion of their Dragon Portfolio I have decided to add some long volatility hedge. I shaved a little of my BDCs to create room. My target equity is being reduced from 45% to 43%, creating a 2% space in my portfolio for this hedge. I am thinking of adding VIRT. Virtu Financial is one of the largest HFT firms, Their profit is very highly correlated with volatility. They also pay a nice dividend. They did the job during Feb 1 to Mar 1 2020 market decline. Thanks again for being my sounding board on this.
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Post by Chahta on Aug 2, 2021 22:49:22 GMT
A question for long term holders of EDV, TLT - Have you ever noticed that its price foretells anything about future equity action? Today equities are sluggish, but still up. EDV is up well over 1%. I'm speculating if that might be any indication of an equity downturn. Or, perhaps, they move independently on their own tracks. helmut , paulr888 , More interesting that the 30 year ^TYX was down but EDV was up.
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