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A question to Junkster: Are we close to the end of the bond trend?

edited December 2013 in Fund Discussions
Dear Junkster,

Your idea that the trends in bond funds are much more persistent than in stock funds is quite interesting. I remember how you emphasized PIMIX (PONDX) when it was trending up. This trend continued for quite a while so one could make tons of money by following it. Recently you mentioned HFRZX, which also seems to be in a long uptrend, replacing PIMIX as one of the leaders.

I wonder what do you think about this strategy for 2014 and beyond? Until 2013, the bond market as a whole was in a stable uptrend, but it seems to be broken now, so one should look into its different corners to find interesting opportunities. Do you expect that the bond momentum strategy may remain profitable in the future, or the idea is not to make predictions and just enjoy it while it lasts?


  • Do you have a link to Junkster's post - I searched and couldn't find it.
  • edited December 2013
    finder said >>>>or the idea is not to make predictions and just enjoy it while it lasts?<<<<<

    Indeed, I don't believe in predicting or forecasting but just reacting and following trends.
    Junk bonds have been in an uptrend since December 16, 2008. One of the *rare* times I ever got in an exact low for any market because of what happened on that day.

    Obviously and in hindsight, the bond bull for Treasuries and other debt ended in 2013. But junk bonds kept rolling with my favorite junk fund (WHIYX) up around 10%. Floating rate also did well and now I am 100% in HFRZX. I am playing with fire there because other than maybe his collaterized loan obligations exposure, not sure what the manager is doing to juice the returns. But using around a 1% to 1.2% stop from highs as my exit point since that is around its worst drawdown over the past 12 months. January is always the best performing month for junk bonds as well as floating rate so eager to see if that historical tendency continues in 2014. Junk bonds seem a tad overpriced to me but I don't concern myself with what I think, just the action of the market itself.
  • Thanks a lot, I do understand it, even the nature of the 1.2% rule. I am considering investing in HFRZX, comparing it now with my other options. Good luck!
  • Reply to @Junkster: >> don't concern myself with what I think

    good advice in any number of endeavors
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