Buy on Rumor, Sell on Fact @WABAC - have you sold all of your bond funds on the expectation of a rise in rates? I'm just trying to understand why anyone would do this while those who control the rates indicate no interest or reason for doing so at this time. I read the articles and I've listened to all the chatter and I just don't see what indications are pointing to a need for disposing bond funds.
Rates can go up even if the Fed isn't actively raising them. Rates will go up if the bonds don't sell.
I found
this article this morning.
The 10-year U.S. Treasury yield topped the 1.49% level on Thursday morning, its highest level in more than a year. . .
. . . The move higher in rates is unnerving investors fearing inflation could be driving it instead of just the economy recovering. The 10-year yield ended January at 1.09%. It closed 2020 well under 1%. So it’s moved more than a half percentage point in under two months, quite rapid for the bond market and relative to rates at these historically low levels.
I don't particularly like bond funds. So rather than watch some remarkable gains -- for bonds -- evaporate, I decided to sell. When I'm ahead 8% on a TIPs index fund it's no fun for me to watch the drip, drip, drip. And so on with the other funds, even if the returns were smaller.
I still have assets that will do well if inflation explodes. FFRHX has been going up while my other bond funds have been going down. MERKX has shown signs of life. But so far, there aren't any wins to lock in.
I might move into ultra-short bond funds if they offer any improvement over Vanguard's money-market settlement fund.
I'm late on reexamining, and re-balancing, my portfolio for the year. For the past 14-1
5 months I have been as completely invested as I have been for a while. So this season I have been taking some profits, closing positions I no longer have faith in, and generally raising cash.
Humankind US Stock ETF
10-Year Closing in on 1.5% (OP) - Blows Right Past - Near 5% (30 months later) - Whee! As of 10:4
5 this morning Bloomberg is displaying a 1.49% yield on the 10-Year treasury bond. (
Story from CNBC) The equity market doesn’t appear to like it very much. If you own intermediate term bonds (
5 year duration) you’ll loose a bit, but equity investors may take a much larger hit if rates continue to rise. (conjecture, of course).
Running into equities to avoid the bond risk might amount to burning down the house to get rid of the mice. Keep in mind that as your bond / bond fund loses paper “value”, the rate of interest you are being paid increases. So it’s a 2-way street for those on the short-intermediate end of the curve.
Good thread from
@Sven re Munger’s take on bitcoin. I tend to agree with Charlie.
https://www.mutualfundobserver.com/discuss/discussion/57794/munger-on-bitcoinYesterday GameStop’s stock price rose over 100% in a single day. That kind of speculative erotism amounts to gambling. I also fear it points to a lot of “froth” in other areas / asset classes. Which ones? That’s the puzzle.
Humankind US Stock ETF Hard pass for me.
Half of these positions are in < 50 lots, and many are in the single digits. There is no reason for a fund to hold 2 ... TWO ... shares of something unless it's to show what companies they like. IMO their holdings list is far too long & embarrassing for a fund at launch time. This reads like someone's SeekingAlpha watchlist.
It seems woefully underpowered in terms of initial overall AUM, too.
Humankind US Stock ETF One might expect that this etf will obtain investment flows. Will the etf find the "Robinhood" run? Fidelity indicates at this time, that options are not available. I consider this a positive for a somewhat more normal (whatever normal is today for the traders) flow of investment monies.
Humankind, home page overview including prospectus.
PRWCX Annual Report Having a large cash allows him to be tactical when opportunities present themselves. He talked about the stressful time in March when the team vetted through new companies in shorter timeframe and to build positions quickly. When one can buy companies with solid balance sheets at depressed prices, downside risk is greatly reduced. Utility stocks and GE are such examples. His mindfulness on risk management is under appreciated. Kinda like what Buffet did with BOA in 2008 and paid out nicely years later. In a 10 years period the fund was able to out-performed S&P500 while having lower drawdown. What more can you ask for?
Humankind US Stock ETF
IQDAX- If it's opaque, just maybe there's a reason? Very disturbing news.
I'm invested in the fund through Schwab and several weeks ago received at least 15 statement letters in the mail notating adjustments to the closing nav
Thought that kind of strange and that with the vaccine development sold off 90% of my holdings in iqdax but still hold approx $25k. Maybe I should say what my account says I hold
I'm sure by the time the class action law suits are settled and the sell down of the fund it will be notably less. Hard to believe the fund manager would play make believe with the valuations of the holdings
Always knew it was kinda black boxey and I could deal with a large drawdown due to black swan bad investment but not fraud bullspit
I know it's a reach but have to say I'm concerned about tmsrx as they are big into derivatives and swaps etc. Of course t rowe is very reputable but so was Lehman and aig and bear stearns etc
Someone said keep it simple. Probably right
Best
Baseball Fan
Munger on bitcoin Great quote from Charlie Munger
Another shareholder asked Munger whether the Daily Journal would follow Tesla’s lead and put bitcoin on the balance sheet. “We will not be following Tesla into bitcoin,” Munger replied flatly.
In the meeting Munger delivered plenty of more burns and digs at cryptocurrency, investment bankers (“they’ll sell shit as long as shit can be sold”) as well as brokers like Robinhood (“dirty way to make money”).
https://finance.yahoo.com/news/munger-recommends-not-buying-bitcoin-by-quoting-oscar-wilde-195247281.html
IQDAX- If it's opaque, just maybe there's a reason?
IQDAX- If it's opaque, just maybe there's a reason?
Small Caps Circling back to this topic.
@BenWP you make a good point regarding the fact that FSMAX is an index fund with 3200. If I ignore that for the moment, MFO Premium really doesn't like the fund (in it's category) - rating the fund a 2 BUT MFO Premium categorizes it in Small Cap Growth which pits it agains WAMCX and that doesn't seem fair.
@Observant1 has the summary of what FSMAX should be categorized as.
In the past
5 years, it's handily beat the S&P
500 and even last year by 19.4 - so why such a low rating of 2? It's one of the better options in a 401k I'm managing which is why I'm interested in opinions on it.
IQDAX- If it's opaque, just maybe there's a reason? @The Shadow:
Thanks for the link.
From that page:
https://bgandg.com/iqdnxCorrect regarding the previous mention in MFO. My days/months seem to get blurred anymore. I actually sold most all my shares only a week ago. So it was a closer call for me than I realized. They stopped taking redemptions on 2/19.
I know that this isn't the first time that this has happened with a mutual fund but the first for me.
@JD_coAgree. The returns weren't extreme. The appeal was an uncorrelated return vs stocks/bonds & maybe a return of 3-
5%/year. Should have stated in the prospectus- uncorrelated to reality as well.
Anyone having trouble acessing accounts at Schwab ? The young men who committed suicide cannot get a return call. These shops have hardly any customer support let alone having call centers. Slow response and long wait time are mild comparing to these shops.
I read Schwab axed 200 the other day. Hope they weren't from the customer-facing side of things.
The young man who killed himself, it's a shame, yes. I recall hearing the story, but I can't help wondering if he knew what he was getting into and/or doing before he put money into the markets. I've had system hiccups tell me I'm in deep margin-call land and while it freaked me out to see, it got resolved fairly quickly ... but of course, if he could never reach anyone to ask about his account, I totally agree that's also a problem.
I wonder if this chaos will swing the pendulum back toward some type of commission and away from payment-for-order-flow that allows the manias of zero-cost trading. I don't mind paying
5 or 10 bucks for a few hundred share stock trade ... it's far better than the $200 I fork over at a full-service wirehouse! (which is why that account is mostly hands-off for long-term wealth building)
Anyone having trouble acessing accounts at Schwab ? Price was experiencing long wait times last week (15-25 minutes). Web-site was fine. Phone message referenced “higher than normal call volume.” Once they picked up however the service was great. I’ll cut them some slack as imagine many are working at home due to Covid.
Curious if there was anything last week that prompted that high call volume? Tax questions maybe?
