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Bond Funds Losing Money In Roughest Stretch Since ‘Taper Tantrum’ Of 2013
"Investors" or TRADERS, eh? I stay away from stuff I can't understand, or have doubts about my ability to make them work--- like puts and calls and shorts, whether boxers or jockeys. My allocation to global bonds pleases me, through thick and thicker. Diversification through ups and downs. Then Market movements don't freak me out. A good fellow I know told me that uncle Donald was costing him money already, and he's not even inaugurated, yet. This fellow put ALL his investments (401k) in "safe" bonds, then pulled it all into a "zero-risk-zero-return" MM fund when the bonds actually went DOWN after the election. Don't be spread too thin, but all eggs in one basket is NOT what to do. And this fine fellow I refer to has a degree in nuclear physics!
"Investors" or TRADERS, eh? I stay away from stuff I can't understand, or have doubts about my ability to make them work--- like puts and calls and shorts, whether boxers or jockeys. My allocation to global bonds pleases me, through thick and thicker. Diversification through ups and downs. Then Market movements don't freak me out. A good fellow I know told me that uncle Donald was costing him money already, and he's not even inaugurated, yet. This fellow put ALL his investments (401k) in "safe" bonds, then pulled it all into a "zero-risk-zero-return" MM fund when the bonds actually went DOWN after the election. Don't be spread too thin, but all eggs in one basket is NOT what to do. And this fine fellow I refer to has a degree in nuclear physics!
I agree with your sentiments regarding the bond market. Same for stocks. It's been proven that jumping in and out is about the worst thing you can do -- for most of us mortals anyway.
Haha @ ol' Rodney! King of the one-liners. Look him up on Youtube on Tonight Show appearances. You'll be rolling on the floor.
Dow gained what? 100 points or so Friday? My holdings were flat. Anything related to bonds fell. My bond funds are pretty tame - things like RPSIX (actually Multi-Sector Income) and DODIX (which Lipper calls Short/Intermediate Corporate). Not discouraged - still best year since '09 by far.
I have a premonition that the FOMC (Federal Open Mouth Committee) may be getting a bit concerned about the super-hot market. While they're likely to raise rates only a quarter point next week (as most watchers expect), there may be language in their statement about future intentions and their view of the economy that could jar the markets. Additionally, they've been in self-imposed black-out mode for several days now before the meeting. After the meeting the members will again be free to sound-off publicly. Could get interesting.
Hmm ... If you liked 10 year bonds yielding 1.5% ... you should love them yielding 2.5%. No?
hank: Hmm ... If you liked 10 year bonds yielding 1.5% ... you should love them yielding 2.5%. No?
Reply: For good or ill, that is exactly my thinking. I've upped my FI allocation from the low-teens to ~ 40% in the last couple of weeks. A lot of it in muni-CEFs in my taxable account. In my deferred accounts, added/opened positions in PIMIX, sundry PIMCO taxable CEFs, and in my 401k PTTRX (the only core-bond option I have available there).
High yield bonds continue to do well. Low-risk OSTIX is up 10.5% YTD. I will take that anytime. Folks taking about buying TIPS, but with those prices already in the stratosphere, it make no sense at this time. PONDX also looking good. Munis did ok last week, but have been slammed over the last 3 months. LASYX is doing what we hoped it would. BSIIX similar. Preferreds like KIFYX are good. LLDYX doing well. And after struggling all year, TGBAX on a tear and up 5.5% YTD. There are some bright stars in the dirty laundry. For us, munis have been hit more than we thought they would. Can't win them all.
Comments
Haha @ ol' Rodney! King of the one-liners. Look him up on Youtube on Tonight Show appearances. You'll be rolling on the floor.
I have a premonition that the FOMC (Federal Open Mouth Committee) may be getting a bit concerned about the super-hot market. While they're likely to raise rates only a quarter point next week (as most watchers expect), there may be language in their statement about future intentions and their view of the economy that could jar the markets. Additionally, they've been in self-imposed black-out mode for several days now before the meeting. After the meeting the members will again be free to sound-off publicly. Could get interesting.
Hmm ... If you liked 10 year bonds yielding 1.5% ... you should love them yielding 2.5%. No?
Reply: For good or ill, that is exactly my thinking. I've upped my FI allocation from the low-teens to ~ 40% in the last couple of weeks. A lot of it in muni-CEFs in my taxable account. In my deferred accounts, added/opened positions in PIMIX, sundry PIMCO taxable CEFs, and in my 401k PTTRX (the only core-bond option I have available there).
Keeping fingers crossed...