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Post by oldskeet on Sept 7, 2021 11:53:19 GMT
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Post by uncleharley on Sept 7, 2021 12:21:22 GMT
The alternative might be to just chuck the bond funds and buy some real estate. Maybe a rental property.
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Post by oldskeet on Sept 7, 2021 12:31:51 GMT
Hi uncleharley , Thanks for making comment. For me, I use FRINX for my slice of real estate income within my portfolio plus it is liquid. I use to have four properties. One being a principal residence, two second homes one on the SC coast and the other in the foothills of the NC mountains with the fouth being some farm land in Cabarrus County, NC. Now I'm down to my principal residence and the coastal home. Probally should have sold the coastal home and kept the foothills home. Oh Well we learn as we go. For bonds ... I need to keep my bond funds to help maintain my portfolio's asset allocation on bubble at 20/40/40 (cash/bonds/stocks). Old_Skeet |
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Post by Chahta on Sept 7, 2021 12:55:22 GMT
The premise in the OP M* article has been hashed out in several articles and posts for a long time. While yield is important the use of bond funds is not yield/TR alone. Hopefully they will provide cash down the road to buy depressed equities.
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Post by Norbert on Sept 7, 2021 13:18:41 GMT
I like the ideas posted above.
Yes, if you spot a fairly priced property, go for some passive rental income. The trick will be to find value, as many popular locations are expensive.
Yes, just hold bonds / cash to use for future opportunities. Of course, the real value of the bonds / cash will be declining.
Or, do like Sara. Look at high quality dividend paying stocks as the new bonds.
It's a challenging situation. Increasing inflation (?) could lead to the end of the mega easy money policies ... someday.
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Post by yogibearbull on Sept 7, 2021 13:29:13 GMT
Table with 30-day SEC yields and durations is interesting.  There are some stable-value funds (SVs) that have guaranteed rates above all of these and there are no risks to principal and accumulated interest. A simple rule-of-thumb is to prefer SVs so long as their guaranteed rates exceed the 30-day SEC yield of bond funds. Unfortunately, the SVs are available only within the workplace plans (401k, 403b, etc). Other alternatives mentioned are also reasonable. |
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on Sept 7, 2021 14:22:28 GMT
Why do you think I've been crying since 2006? When we bought our first bond ETF.
I don't like to speculate. I consider myself an INVESTOR. Investors buy assets with a POSITIVE expected return.
Well...what do you call holding an asset class (i.e. investment grade bonds) that has an EXPECTED NEGATIVE return...hoping that somebody will buy them when the stock market crashes?
I call this SPECULATION. Not investing.
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Deleted
Deleted Member
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Post by Deleted on Sept 8, 2021 19:33:04 GMT
yogibearbull said "Unfortunately, the SVs are available only within the workplace plans (401k, 403b, etc)."
Stable Value Fund is also available in my 529 college savings plan.
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Post by yogibearbull on Sept 8, 2021 20:00:31 GMT
yogibearbull said "Unfortunately, the SVs are available only within the workplace plans (401k, 403b, etc)."
Stable Value Fund is also available in my 529 college savings plan.
Which 529? I believe TIAA 529 is one. There may be others. Special TIAA IRA (with eligibility requirements) also has SV. Strange to see reply from @deleted - normally, "Deleted" are posters who have left the site or have been kicked out (their old IDs are replaced by default "Deleted"). Or, posters use "deleted" for their deleted text from posts. But you seem to be an active poster. Have you considered using a more sensible Display Name (from Profile/Edit Profile/Personal)? |
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Post by Chahta on Sept 8, 2021 23:50:13 GMT
YBB, I asked admin about it. That is his/her screen name…..”deleted”.
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Post by chang on Oct 21, 2021 0:24:14 GMT
I think I started edging back into I/T bonds too early. They’re sucking wind. I might reverse recent adds and stay in the very short term stuff. Still, good active managers ought to know this better and sooner than I. I am reinvesting dividends so I expect to earn my original yield over the average duration … but that doesn’t make it any easier to watch NAVs drop every day.
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Post by Chahta on Oct 21, 2021 0:55:33 GMT
I remember asking chang if you were buying IT. Is it just DODIX still? Since most 50/50 ports have IT as ballast it may be a good time to buy since prices have dropped from last year. I have been contemplating getting back in. But to be fair most bond funds are dropping some these days since they are sensitive to the 10 year rising. On the negative side I feel the FED will be raising rates this year for inflation control. ST bonds have taken a beating lately too. What’s the old saying about “falling knives”? |
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Post by yogibearbull on Oct 21, 2021 1:13:17 GMT
Chahta, "...On the negative side I feel the FED will be raising rates this year for inflation control..." Wow, that is a seriously out-of-the-box idea (if this year means remainder of 2021, and not the next 12 months). Most see only the QE-taper for the next 6-9 months but not Fed rate hikes. Bond market may soon take 10-yr to 1.75%, and how far is that from here? I have been mentioning ultra-ST or ST for holding pool. But if in IT already, it is too late to sell.
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Post by chang on Oct 21, 2021 4:29:10 GMT
But if in IT already, it is too late to sell. If I had a dollar for every time I read, heard, or thought that, and then the asset in question continued to go down another 30%… |
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Post by chang on Oct 21, 2021 4:35:53 GMT
I remember asking chang if you were buying IT. Is it just DODIX still? Since most 50/50 ports have IT as ballast it may be a good time to buy since prices have dropped from last year. I have been contemplating getting back in. But to be fair most bond funds are dropping some these days since they are sensitive to the 10 year rising. On the negative side I feel the FED will be raising rates this year for inflation control. ST bonds have taken a beating lately too. What’s the old saying about “falling knives”? I'm mostly out of IT compared to where I was before middle of last year, when I sold BIV/VBILX and PIGIX. Yes I still hold DODIX. The "adds" I was referring to were minor adds to DODIX and VWEAX (IT HY). Not my most inspired ideas, and I am thinking about backing them out, but by no means getting out of these funds. They will deliver somewhere between 2-4% over their durations of 3-5 years (with dividends reinvested),with some volatility of course, but I plan to hold these for much, much longer than their average duration, so what's the point of fleeing to cash? I am happy enough to hold a diverse FI portfolio with various bases covered. The bulk of it, however, is in Ultrashort right now. The bonds embedded in Wellesley and Wellington are probably holding those funds back, but the magic of those funds is that you don't see all the individual wheels working, and the overall LT results are attractive, so they're easy to hold. The last piece of the FI puzzle is munis, and I have a big chunk in LT munis, but I am committed to holding until they scatter my ashes. |
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Post by Mustang on Oct 21, 2021 12:26:46 GMT
I remember asking chang if you were buying IT. Is it just DODIX still? Since most 50/50 ports have IT as ballast it may be a good time to buy since prices have dropped from last year. I have been contemplating getting back in. But to be fair most bond funds are dropping some these days since they are sensitive to the 10 year rising. On the negative side I feel the FED will be raising rates this year for inflation control. ST bonds have taken a beating lately too. What’s the old saying about “falling knives”? I read a poll of 67 economists. 40 of the 67 said they expected the raise to be in the first quarter of 2023. The rest said the 4th quarter of 2022. The skeptic in me noted that most do not think the fed will do anything until after the election. |
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Post by Chahta on Oct 21, 2021 12:41:49 GMT
Mustang, if they wait inflation may not wait for them to act. If inflation stays at 5% the election is done.
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Post by Chahta on Oct 21, 2021 12:48:37 GMT
Chahta , "...On the negative side I feel the FED will be raising rates this year for inflation control..." Wow, that is a seriously out-of-the-box idea (if this year means remainder of 2021, and not the next 12 months). Most see only the QE-taper for the next 6-9 months but not Fed rate hikes. Bond market may soon take 10-yr to 1.75%, and how far is that from here? I have been mentioning ultra-ST or ST for holding pool. But if in IT already, it is too late to sell. I should have said this "next" year. My mind works faster than I can type on my phone. What else do they have to control inflation if it stays the way it is? 2 1/2 months would be very fast. I have read that the politicians are getting weary of Powell and his reluctance to raise rates. Which would be worse; raising rates or watching inflation take over? |
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Post by yogibearbull on Oct 21, 2021 13:25:35 GMT
My comments on Powell elsewhere: OK, so only 3 FOMC meetings now remain before Powell's current term ends in early Feb 2022. Betting markets are now showing these odds, www.predictit.org/markets/detail/7398/Whom-will-the-Senate-next-confirm-as-Chair-of-the-Federal-ReservePowell 72%, Brainard 22%, Bostic 8%, Ferguson 3%, Reskin 3%, Spriggs 1%. Some mud from financial trading stuff has splashed over Powell (the latest news is that he too traded stock mutual funds in 2020, so his denial at the last FOMC, in the hindsight, was only for individual stocks, and his statement that he held only munis to maturity was, to say charitably, a half-truth or incomplete-truth) and also Brainard (she is apparently in charge of ethics/board affairs or something like that within the Fed). So, can dark-horse candidates be ruled out? Bostic was already passed over twice - for Treasury Secretary and OCC Comptroller, and Ferguson may be very available (I think that he never left DC and now formally retired from TIAA). These are all guesses. |
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Post by Chahta on Oct 22, 2021 12:21:20 GMT
Looking at the Schwab site I see that my muni MM fund has a SEC 30-day yield of .71% but yields less than .1% currently. I am not sure what the 30-day yield is predicting. Are MM rates about to increase?
Also I see that the Schwab Government Money Fund is yielding .62% currently.
All due to G bond/bill etc. rising?
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Post by yogibearbull on Oct 22, 2021 13:36:53 GMT
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Post by Fearchar on Oct 22, 2021 16:33:03 GMT
Bonds just don't look to be good for amateur's (IMO).
I've been tracking several ETFs of varying durations and over the last year, they have been losing out to PIMIX.
Over 3 years, BIV and VCIT have nosed out PIMIX, but not so over the 5 or 10 year period.
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Post by roi2020 on Oct 22, 2021 18:07:50 GMT
PIMIX has generated excellent long-term returns.
The fund's managers made astute investments in legacy non-agency residential mortgage-backed securities (RMBS) after the global financial crisis.
The availability of legacy non-agency RMBS has declined while Pimco Income's AUM have increased considerably.
Although PIMIX is still a decent fund, I don't think it will perform nearly as well in the future.
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Post by anitya on Oct 22, 2021 23:57:56 GMT
Yogi is right. I can not see how one gets there. Both SNVXX and SNSXX, with an ER of 0.34%, show daily distribution of $0.000000274, which of course can vary from day to day. If the 0.54% 7 day yield as of 10/21/2021 for SNSXX stated on Schwab website were correct, the fund would have to earn nearly 0.90%. Yesterday, 2-year Treasury bonds were yielding at 0.436%. |
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Post by rhythmmethod on Oct 23, 2021 2:21:17 GMT
My unorthodox way around this is to own some FI CEF (as buy and hold) for income and hold cash as cash (not cash-like). In addition to some PIMIX and PTIAX. Shrugs shoulders.
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Post by Fearchar on Oct 23, 2021 9:42:36 GMT
Although PIMIX is still a decent fund, I don't think it will perform nearly as well in the future. Tanks roi2020; Do you have a suggestion for an alternative? It's always a good idea to look around. |
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Post by Chahta on Oct 23, 2021 10:41:17 GMT
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Post by fishingrod on Oct 23, 2021 12:48:55 GMT
"Due to a one-time distribution to shareholders of certain Schwab Money Funds, the funds’ stated yields are temporarily increased. Because this increase is temporary, investors should not rely on it for making investment decisions."
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Post by richardsok on Oct 23, 2021 16:35:29 GMT
My unorthodox way around this is to own some FI CEF (as buy and hold) for income and hold cash as cash (not cash-like). In addition to some PIMIX and PTIAX. Shrugs shoulders. Not so unorthodox, rm. I often behave similarly. Not by design. I just wind up that way. I've traded in and out of Nuveen Short Dur (JSD) from time to time. Fairly stable B - to - BBB corporate paper. Of course, buying now misses the long slow climb-back from the Covid panic, but what can you do? Still, pays 6.8% (fully earned) with a -3 discount. Could be worse. Or another choice: good ol' Connecticut Light & Power (CNLPL) hands-down fave among widders, orphans & trust babies from Bangor to Honolulu. Tossing off 5.5% quarterly since Moses was in short pants. |
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Post by anitya on Oct 23, 2021 17:18:28 GMT
"Due to a one-time distribution to shareholders of certain Schwab Money Funds, the funds’ stated yields are temporarily increased. Because this increase is temporary, investors should not rely on it for making investment decisions."
Thanks fish. I will not be surprised if we haven’t heard the last of this. I am more impressed that somebody looked for the 7 day yield of these funds in the first place. |
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