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No help from Treasury bond/note stuff today, they may have my 2018 equity magic money, but....
If I get what you are saying....this is the problem that sometimes arises when the bond market starts worrying about inflation...p/e ratios decide to contract and treasuries decide not act as a complete safe haven...hopefully these worries will not prove to be too painfully realistic....
I haven't heard anybody anywhere in the past few years recommend buying investment grade debt (I guess @Ted holds some corporates). Interesting, since folks chased treasury yields all the way down to 1% or some foolish figure. Now that they’re over 2.8%, nary a word. It was a rough week for a lot of bonds. That’s what happens when rates spike higher. Everybody sees inflation. But you won’t have much (IMO) If the central banks jack up the short end and push us into recession. Pay your money. Take your chances.
Are high grade bonds with durations in the 5-year range still “dumbdumb”? Or might they fill a need for some seniors unnerved by turmoil in the equity and junk bond arena? (I’m biased having added a few GNMAs recently more for protection than with any thought of making money).
Hi @hank You mentioned IG corp. bonds.......22% of our portfolio remains in FCBFX. Tis doing a bit better than the IG bond etf LQD , but in in the middle of the pack in this area. Although I am sure some of the other funds are doing some of the "strange brew" stuff. ---FCBFX = -2.2% YTD
The title for this thread is relative to the "funny" action of investment grade bonds, in particular; in reaction to the recent melt. SO........as Marvin Gaye once sang, "What's Go'in On?" 1. The leverage stuff blew a gasket, which may have done nothing more than trip the 'bots into sell mode, which allowed for a cascade??? I have to believe there were humans in the room waiting to hit the kill switch.....????????????? 2. Safe haven bonds didn't get a hug, cause the equity burn is/was just a blip for the leverage and time will cure this problem in short term.....?????????? 3. Perhaps the big houses have not dumped any holdings, thinking this is just a blip and let some of the fools crash and burn........NAH, the big houses are not buy and hold, are they????????????? 4. The markets would be at 1985 levels if based on the quality of government.Must be some other reasons, and not politics, eh??????? 5. OF EQUITY, large growth in the tech. and health areas got a positive bump Friday (other areas I likely am not aware of and..... Most small and value oriented not as happy.
I agree that I find nothing fundamental likely attached to the sell down or to what ever may be a positive path forward with or without more sell down first. A bunch of overbought, big money forces that will likely push the string again. I have more questions and no good answers. Take care, Catch
Comments
https://www.nytimes.com/2018/02/09/opinion/republicans-deficit-budget.html
https://www.nytimes.com/2018/02/09/opinion/no-fairy-no-cry.html
correct, it's not when it cripples their children in order to float the rich even higher
come on, you can do better; there is real discussion to be had about how best to pay for what we do and need and want
this ain't it
Are high grade bonds with durations in the 5-year range still “dumb dumb”? Or might they fill a need for some seniors unnerved by turmoil in the equity and junk bond arena? (I’m biased having added a few GNMAs recently more for protection than with any thought of making money).
BTW - Sad that every thread if left to its own course seems to lead to bitter wrangling (not that I haven’t sometimes unwittingly contributed). A sign of the times I think - plus @Lewis’s Sputnik-bots may be monitoring websites for mention of certain names. Dunno. It’s gotten so bad some in Congress are considering building a wall (there) to wall-off warring Dem and Rep staffers. https://www.cbsnews.com/news/house-intel-committee-gop-plan-to-wall-themselves-off-from-democrats-devin-nunes-adam-schiff/
I also observe that many income investors are increasing draw to riskier bonds including junk and emerging market debts.
You mentioned IG corp. bonds.......22% of our portfolio remains in FCBFX. Tis doing a bit better than the IG bond etf LQD , but in in the middle of the pack in this area. Although I am sure some of the other funds are doing some of the "strange brew" stuff.
---FCBFX = -2.2% YTD
The title for this thread is relative to the "funny" action of investment grade bonds, in particular; in reaction to the recent melt.
SO........as Marvin Gaye once sang, "What's Go'in On?"
1. The leverage stuff blew a gasket, which may have done nothing more than trip the 'bots into sell mode, which allowed for a cascade??? I have to believe there were humans in the room waiting to hit the kill switch.....?????????????
2. Safe haven bonds didn't get a hug, cause the equity burn is/was just a blip for the leverage and time will cure this problem in short term.....??????????
3. Perhaps the big houses have not dumped any holdings, thinking this is just a blip and let some of the fools crash and burn........NAH, the big houses are not buy and hold, are they?????????????
4. The markets would be at 1985 levels if based on the quality of government.Must be some other reasons, and not politics, eh???????
5. OF EQUITY, large growth in the tech. and health areas got a positive bump Friday (other areas I likely am not aware of and..... Most small and value oriented not as happy.
I agree that I find nothing fundamental likely attached to the sell down or to what ever may be a positive path forward with or without more sell down first.
A bunch of overbought, big money forces that will likely push the string again.
I have more questions and no good answers.
Take care,
Catch