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"It's time to stop worrying and start acting," say the author (who also seems to suggest that a sustained rate increase "isn't expected to happen until sometime next year or beyond").
His suggestions are common: short-term bonds, maybe high yield and/or a strategic income fund. His recs seem pretty much driven by a simple long-term returns screen and are a mix of ETFs, load and no-load funds.
Reply to @David_Snowball: So why do anything, except maybe, dump bonds and wait for a better bond market? It seems counter productive to loose while staying in a screwed up bond market, at least dump EM and Global. At least cash doesn't go down.
Stupid Question. We expect Active Managers to "save us" from bear market declines right? Why are we not supposed to have to Multisector Bond fund managers protect us from ACTIVELY figuring what part of the bond market to be in at the right time? Just because fund name does not contain the word "unconstrained" does not mean manager is allowed to suck.
Something tells me a lot of bond fund manager obituaries are going to be written as interest rates start rising if they don't get this right. Looks to me just like there have been times when it has been easy to be an equity manager, same has generally been the case for an extended period of time for bond managers, and that may be about to change and we will know over the next 5-10 years.
AQRNX be damned, to date I have never bought a fund with name "bond" or "yield" in it EXCEPT for RPHYX which is of course unique. I have relied on balanced/allocation funds to provide me bond exposure leaving it to manager to decide how much and in what kind of bonds to invest in.
I asked question recently on VWELX which I own. Just last night looked at VWINX. The sucker holding up quite well, but has even less flattering comment on M* and duration of 6+. Either these managers will/are wising up and we haven't just seen their latest portfolios, or they will show their "true colors" in a manner of speaking over the coming years.
Reply to @VintageFreak: " We expect Active Managers to "save us" from bear market declines right?"
No. Most mutual funds are long and if it's a bad year it's a bad year - I mean, how many funds effectively just sat back and watched 2008 happen? Lots. How many tried - at least a little bit - to lighten up risk? Not that many.
A fund may have flexibility, but mutual funds are not hedge funds and are not nimble enough to react to the week-to-week noise and especially the day-to-day. A fund is not going to be perfectly everything for all seasons - ultra-conservative at the right time and then hitting home runs during the good times. An absolute return fund is going to - optimally - lose less during the bad times, but is probably not going to hit home runs during the good times either.
I think people either have to have a long-term view with what they get into and accept their risk tolerance and not try to adjust it for the day-to-day and month-to-month or actively manage. If you own a conservative fund and are upset when it's not hitting a home run in good times, what was your reasoning for getting into a conservative fund in the first place? If things aren't good and someone is asking why they switched into an aggressive fund after the market had gone up and their conservative fund had disappointed, well.... Know yourself, get into what is appropriate for you and that's it - or try to be successful at timing the market.
Or make your portfolio into multiple parts with a long-term portion and a more actively managed portion that can dial risk up/down. Whatever is appropriate for your situation.
"Just because fund name does not contain the word "unconstrained" does not mean manager is allowed to suck."
Comments
His suggestions are common: short-term bonds, maybe high yield and/or a strategic income fund. His recs seem pretty much driven by a simple long-term returns screen and are a mix of ETFs, load and no-load funds.
David
Something tells me a lot of bond fund manager obituaries are going to be written as interest rates start rising if they don't get this right. Looks to me just like there have been times when it has been easy to be an equity manager, same has generally been the case for an extended period of time for bond managers, and that may be about to change and we will know over the next 5-10 years.
AQRNX be damned, to date I have never bought a fund with name "bond" or "yield" in it EXCEPT for RPHYX which is of course unique. I have relied on balanced/allocation funds to provide me bond exposure leaving it to manager to decide how much and in what kind of bonds to invest in.
I asked question recently on VWELX which I own. Just last night looked at VWINX. The sucker holding up quite well, but has even less flattering comment on M* and duration of 6+. Either these managers will/are wising up and we haven't just seen their latest portfolios, or they will show their "true colors" in a manner of speaking over the coming years.
No. Most mutual funds are long and if it's a bad year it's a bad year - I mean, how many funds effectively just sat back and watched 2008 happen? Lots. How many tried - at least a little bit - to lighten up risk? Not that many.
A fund may have flexibility, but mutual funds are not hedge funds and are not nimble enough to react to the week-to-week noise and especially the day-to-day. A fund is not going to be perfectly everything for all seasons - ultra-conservative at the right time and then hitting home runs during the good times. An absolute return fund is going to - optimally - lose less during the bad times, but is probably not going to hit home runs during the good times either.
I think people either have to have a long-term view with what they get into and accept their risk tolerance and not try to adjust it for the day-to-day and month-to-month or actively manage. If you own a conservative fund and are upset when it's not hitting a home run in good times, what was your reasoning for getting into a conservative fund in the first place? If things aren't good and someone is asking why they switched into an aggressive fund after the market had gone up and their conservative fund had disappointed, well.... Know yourself, get into what is appropriate for you and that's it - or try to be successful at timing the market.
Or make your portfolio into multiple parts with a long-term portion and a more actively managed portion that can dial risk up/down. Whatever is appropriate for your situation.
"Just because fund name does not contain the word "unconstrained" does not mean manager is allowed to suck."
Any fund can do badly.