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You are paying attention to bond yields, yes?

catch22catch22
in Fund Discussions
I anticipated a direct post related to bond yields actions, prior to this 8:50 am, EST, post.

Short on time today, but IMHO; one needs to give attention to the bond yield drops.
Bond yields have had significant moves in the past few days, and yesterday in particular. As a reference, the UST, 10 year had a yield change drop, that in math terms is about 9% since Thursday morning.
Had this 9% been for SPY, SP-500 or related similar equity market; one would be seeing and reading very large headlines.
It is my continued opinion that one needs to continue to observe investment grade bond yields to help maintain a "feel" for the overall health and direction of the equity markets.
This yield action may be a quick flash for whatever reasons drive these movements from the large players. I'm not formally trained in economics, but a long time observer.
Your investment grade bond holdings should have seen significant positive price movements yesterday, August 1 and early indicators today suggest the same for today (August 2). Investment grade bonds have had very decent gains YTD.
Hang in there,
Catch

Comments

  • beebee
    Anyone making short term portfolio adjustments to capture bond fund capital appreciation as rates move down?

    PTIAX had a .51% gain yesterday.
  • hank
    edited August 2019
    bee said:

    Anyone making short term portfolio adjustments to capture bond fund capital appreciation as rates move down?

    Those of us statically allocated can only watch in disbelief. As for my funds, I was surprised yesterday when DODIX jumped .43%, but absolutely stunned to see docile OUSGX leap by the same amount.
  • catch22catch22
    @hank
    Generally..........investment grade corp. bonds were up in price yesterday about 1%. OUSGX is about 61% invested in U.S. corp. bonds.
  • MarkMark
    No. I let PIMCO do that for me. Very long PCI, PDI, PFN and PTY.
  • Sven
    All the prices of my bond funds rose yesterday. Likely their yields are moving downward.
  • hank
    edited August 2019
    Thanks for checking @Catch22. OUSGX fell quite a bit the day before - so yesterday’s gain was in part a bounce.

    @bee is probably correct that outsized gains in bond funds don’t usually persist long. So capturing some gains by moving to ultra short might be a good idea. Personally, it ain’t worth the effort. (Getting lazy at this point in life):)
  • CrashCrash
    Yes, I was amazed at PTIAX yesterday. Up again today. I took 56% of my PRSNX and bought that much of RPSIX today. Was it a happy coincidence, or a major blunder? After I'd seen that PRSNX is carrying a bit more risk than I like, and its div shrank in June and July, I decided it was time. I am not particularly attracted to any fund full of other funds, but with the added bit (13%) of equities in its portfolio, I am rather comfortable with RPSIX. PRSNX was up today, and RPSIX was down by just a penny. But these are not equity funds, anyhow... Eventually, I suppose I'll start taking the divs rather than re-investing it all.
  • AndyJ
    edited August 2019
    Long Treasuries are killing it, and the 3m/10y inversion I mentioned recently on another Catch thread is up into nosebleed territory. Hard to imagine the yield drop's going to continue more than a day or two longer (if that) at this pace, in the short term anyway.

    Got caught w/o any long Ts, but muni funds, PTIAX, and PRSNX are making up for it. The smaller than normal stakes I have in PCI and PDI are doing fine, but not contributing a lot to gains now since I took most of the ytd profits on them and PCN earlier.
  • catch22catch22
    @AndyJ et al

    Usually a decent overview and thoughts regarding credit markets and debt issues related. If you've a few extra minutes in the schedule, have a view.

    Bloomberg Real Yield program, Aug. 2 (22 minute video)

    Good evening,
    Catch
  • AndyJ
    edited August 2019
    catch22 said:

    @AndyJ et al

    Usually a decent overview and thoughts regarding credit markets and debt issues related. If you've a few extra minutes in the schedule, have a view.

    Bloomberg Real Yield program, Aug. 2 (22 minute video)

    Good evening,
    Catch

    Right on, @Catch. I usually watch over the weekend; it's live on Friday. I posted a link to it on MFO a while back, in fact. I like how Jonathon facilitates and gets so much out of the pro participants.
  • catch22catch22
    @AndyJ
    Yes. Occasionally one finds a program now and then, that is worth the time to gain insight without anyscreaming or hollering; an intellectual discussion. This is very professional; and I agree, the host moves through the topics properly.
    WONDERING.........how/who selects the guests?
  • AndyJ
    edited August 2019
    Dunno who or how, Catch, but it's always chief FI investment folks from (mostly) the big houses, with quite a few repeats and at least some of the time, one guest from overseas. I like some of the repeats 'cause you can see their strategy changes over time.

    You also learn a bit about longer term house views. For one example, the always bullish-on-credit JPM guy would lead me, all else being equal, to avoid their credit-sensitive funds if there's any heightened credit risk in the markets.
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