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For the math people - Bill Fleckenstein posted this yesterday ...
The Street's Favorite New Chart Pattern: ‾\_(ツ)_/‾
Personal note: I’ve cut back fixed income over past few months, so maybe I’m being hypocritical, but my guess is that piling out of bonds and into riskier assets now is like leaping from frying pan into fire. Still have 25% dedicated to fixed - about 30% of that being cash. Haven’t given up on DODLX. Recently merged small amount of DODIX into it. I trust that team to do reasonably well with the fund over time. Hurts now of course.
@Sven did you mean PRFRX? 3.88 yield right now, and yes----- it has hugged the zero line through all of this travail and woe. @hank love the new chart pattern. LOL. And your observation is spot-on.
Yes, you got the correct. Remember that Giroux uses this fund for his bond allocation (the largest position). PRWCX is doing well without holding other investment grade bonds.
Hats off to VWINX. I don’t own it, but if my tracker is correct it lost a penny today - a negligible amount on a day when bonds were hammered. Cripes. DODBX outperformed DODLX today!
Yes, you got the correct. Remember that Giroux uses this fund for his bond allocation (the largest position). PRWCX is doing well without holding other investment grade bonds.
Which fund does Giroux use for his bond allocation?
Yes, you got the correct. Remember that Giroux uses this fund for his bond allocation (the largest position). PRWCX is doing well without holding other investment grade bonds.
Which fund does Giroux use for his bond allocation?
PRFRX. Floating Rate/Bank Loans is his largest bond position inside PRWCX.
With a lot of discussion about folks building up cash %age, note that fund flows into equities have not slowed this year, while flows into bond funds are negative (redemptions, no surprise there!) and to my amazement, flows into money market funds are also negative this year. The latest 3 mo flows out of MM funds is twice as much as the outflows from bond funds. This data is from Fidelity.
(I also wanted to bump up this thread lest folks forget about it when rates start going down for a few days.)
Outflows from MM funds is an interesting phenomenon when total outflows from MM plus bond funds together constitute 50% more than the inflows into equity funds. And working folks are constantly earning new money and so, I expect MM funds to continuously have inflows. Are folks starting to draw down MM funds to fill their online savings accounts + buy (treasury?) bonds directly? or is there a bigger phenomenon such as private equity + venture investing + multiple home / rental real estate + alternate assets investing?
In the last 4+ years, the only time MM funds saw this much (or bigger) outflows is during the last six months of 2020 when folks were buying first bond funds and then equity funds with both hands, drawing down the trillions of $$ of MM funds built up during the first six months of 2020.
Only 1.2% of PRWCX was in TFAIX at year-end? But that is specifically a bank loan fund. ....In other news: I had 4 bond funds. Down to 2 now: PRFRX and TUHYX. Great timing with the HY, as ever. Doggy poopies.
“Outflows from MM funds is an interesting phenomenon when total outflows from MM plus bond funds together constitute 50% more than the inflows into equity funds. And working folks are constantly earning new money and so, I expect MM funds to continuously have inflows. Are folks starting to draw down MM funds to fill their online savings accounts + buy (treasury?) bonds directly? or is there a bigger phenomenon such as private equity + venture investing + multiple home / rental real estate + alternate assets investing?”
Is there a way to track inflows into these iffy I-Bonds? $10,000 ain’t much for 1 individual. But to coin an old song: $10,000 here … $10,000 there …and pretty soon you’re talking about real money.
As noted in the I-Bond thread, one can bunch up lot of buying as gift I-Bonds. So, let us say that you have 5 favorite relatives and friends (include me, if you want (-:)), then you can buy, say, $100K for EACH in gift I-Bonds to HOLD in your Treasury Direct account, and dole/DELIVER them out at $10K/yr/person over 10 years. That would be $510K total in I-Bond purchases NOW or ON 5/1/22, $500K in gift I-Bonds and "puny" $10K for yourself (-:). Well, this a hypothetical for those who complain about not being able to buy enough but think of the estate and asset transfer angle. Of course, you cannot have the gifted bonds yourself for any reason (actions are irreversible).
What if the I-Bond rate collapses in a year or two? Well, then you still go through your estate plan but the receiver can sell them and buy something else.
Edit/Add: Treasury Direct also has linkable history of Savings Bond sales, 1935-2012. Sales peak (including all types of Savings Bonds) were in 1944 ($16.04 billion; WW II time), 1978 ($7.96 billion), 1986 ($11.91 billion), 1992 ($17.70 billion), 2001 ($11.58 billion), 2005 ($22.43 billion). I am sure there is a good story behind the ups and downs in the Savings Bond sales. https://www.treasurydirect.gov/indiv/research/history/history_sbsales.htm
Interesting! I decided to learn more about gifting I-bonds and found this rather detailed discussion: https://thefinancebuff.com/buy-i-bonds-as-gift.html Sorry, after I posted, I found that yogibearbull already gave this link in another discussion:)
Thanks @Yogibearbull. That is definitely one likely explanation and one I had included as a possibility. It avoids the ER of MM funds and there are no commissions to pay for these trades at the brokerages I know. Of the 1mo, 3mo, 6mo, & 1 yr maturities, which one would you buy at this time if you were to buy some treasury bills. Below I include the current rates from CNBC. You are not responsible for your answer. (I moved the taxable accounts' cash to online savings accounts but need to do something with the cash in the IRAs.)
US 1-MO 0.228 US 3-MO 0.757 US 6-MO 1.186 US 1-YR 1.685
Comments
Percentages would be meaningful, yes?
https://fidelity.com/news/article/top-news/202204051009RTRSNEWSCOMBINED_KCN2LX1BZ-OUSBS_1
VG total bond index, VBTLX, -0.09, -0.86%
VG total international bond index, VTABX, -0.12%, -0.57%
Pimco Income, PIMIX, -0.08, -0.71%
D&C income, DODIX, -0.09, -0.68%
VG emerging market government bond, VWOB, -1.07, -1.53%
Few bonds survived,
Osterweis Strategic income, OSTIX, 0.0, 0,0%
TRP floating rate bond, PRFRX, +0.01, +0.11%
I seem to remember every time I seem to remember that every time Geithner gave a press conference, markets dropped.
Hoping Brainard does not establish same pattern!
Most bond funds hover around $10.00, launch price.
So, 10 cents typically close to 1%. That's a big move.
"UP1CENT" is usually a happy day for bond fund owners.
On a $100K investment, means up $100.
Up 10 cents is huge ... $1K!
On other hand, I know some very conservative investors that "down 10 cents" is crushingly painful!
c
PS. If I could buy the perfect gift for Junkster, it would be a personalized license plate: UP1CENT.
The Street's Favorite New Chart Pattern: ‾\_(ツ)_/‾
Personal note: I’ve cut back fixed income over past few months, so maybe I’m being hypocritical, but my guess is that piling out of bonds and into riskier assets now is like leaping from frying pan into fire. Still have 25% dedicated to fixed - about 30% of that being cash. Haven’t given up on DODLX. Recently merged small amount of DODIX into it. I trust that team to do reasonably well with the fund over time. Hurts now of course.
Bank Loans = 10.7%
Floating Rate Fund I-Class TFAIX = 1.2%
Corporate Bonds = 7.1%
Money Market = 10.8%
Bank loans were almost 12% of the portfolio at that time.
(I also wanted to bump up this thread lest folks forget about it when rates start going down for a few days.)
Outflows from MM funds is an interesting phenomenon when total outflows from MM plus bond funds together constitute 50% more than the inflows into equity funds. And working folks are constantly earning new money and so, I expect MM funds to continuously have inflows. Are folks starting to draw down MM funds to fill their online savings accounts + buy (treasury?) bonds directly? or is there a bigger phenomenon such as private equity + venture investing + multiple home / rental real estate + alternate assets investing?
In the last 4+ years, the only time MM funds saw this much (or bigger) outflows is during the last six months of 2020 when folks were buying first bond funds and then equity funds with both hands, drawing down the trillions of $$ of MM funds built up during the first six months of 2020.
Is there a way to track inflows into these
iffyI-Bonds? $10,000 ain’t much for 1 individual. But to coin an old song: $10,000 here … $10,000 there …and pretty soon you’re talking about real money.Monthly I-Bond Sales
10/2021 $0.23 billion
11/2021 $1.07 billion (new rate 7.12%)
12/2021 $2.78 billion
01/2022 $3.26 billion
02/2022 $0.91 billion
As noted in the I-Bond thread, one can bunch up lot of buying as gift I-Bonds. So, let us say that you have 5 favorite relatives and friends (include me, if you want (-:)), then you can buy, say, $100K for EACH in gift I-Bonds to HOLD in your Treasury Direct account, and dole/DELIVER them out at $10K/yr/person over 10 years. That would be $510K total in I-Bond purchases NOW or ON 5/1/22, $500K in gift I-Bonds and "puny" $10K for yourself (-:). Well, this a hypothetical for those who complain about not being able to buy enough but think of the estate and asset transfer angle. Of course, you cannot have the gifted bonds yourself for any reason (actions are irreversible).
What if the I-Bond rate collapses in a year or two? Well, then you still go through your estate plan but the receiver can sell them and buy something else.
Edit/Add: Treasury Direct also has linkable history of Savings Bond sales, 1935-2012. Sales peak (including all types of Savings Bonds) were in 1944 ($16.04 billion; WW II time), 1978 ($7.96 billion), 1986 ($11.91 billion), 1992 ($17.70 billion), 2001 ($11.58 billion), 2005 ($22.43 billion). I am sure there is a good story behind the ups and downs in the Savings Bond sales. https://www.treasurydirect.gov/indiv/research/history/history_sbsales.htm
Sorry, after I posted, I found that yogibearbull already gave this link in another discussion:)
US 1-MO 0.228
US 3-MO 0.757
US 6-MO 1.186
US 1-YR 1.685