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AndyJ

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AndyJ
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  • Hi Andy,

    Happy Easter!

    I sold my two longer duration muni bond funds earlier, but unfortunately, I did not sell VWALX. I have watched the Paul McCulley interview a few times and I am still having a problem understanding his thinking. I think that is because I am not able to fully grasp "cyclical" and "secular".

    I am trying to use his thoughts for an actionable plan for VWALX. Is he saying that rates are or are not reflected in the current value of bond funds? While he does not address munis, if I could understand his thinking, I gather it is for all type of bonds. Is it too late to sell VWALX?

    Best,
    Mona
    April 17
    • AndyJ
      Hi Mona, happy Easter to you too.

      I'm not sure P Mc said what he thought was priced in at the moment. Whether to sell FI that's already down a lot (for FI)? On one side, the current supply and supply chain problems seem likely to persist for at least a while, especially given the disruptive war and the continuing pandemic boosts from variants -- arguing to just get out and stay out of duration & investment grade risk. On the other, rates have already run far and fast and some advisors are recommending buying now. Plus there's a non-zero chance of an economic pullback, maybe even a recession, on kind of the medium horizon, arguing for risk-off. I don't know what I'd do - maybe split the difference and sell half, and if rates keep going up say beyond 3% without much pause, think about selling the rest.

      That's about all I know to suggest.

      Cyclical refers to cycles within a macro, "secular" time frame. Examples of secular horizons are the easy money, supportive environment for financial assets time that may be ending now, or the longer globalization trend (since the '90s, I guess?) that also may be on the verge of change.
  • I don't think short term is an important reason to want to buy a fund.
    March 31
  • Hi there!

    So, at the end of the day, if you sell mid-month, does it make a difference if it is a Nuveen bond fund which declares daily and pays monthly (get interest at time of sale or at the end of the month) or say a Baird fund that declares and pays monthly (get the interest in the NAV)? Will you get the same amount of dollars?

    Best,
    Mona



    March 29
    • AndyJ
      Mona! Yes, the same amount of income dollars. From your wording in your message, it looks like you've got it down cold.

      It's been dizzying to watch the HY muni funds get whacked. Probably will be bargains ahead, but maybe not for a good while.
  • Before I forget, any feedback yet on the e-mail inquiry you made to Performance Trust re. PTIAX and the credit allocation of its muni bonds?
    January 2016
    • AndyJ
      Hey, just fyi, I talked again with the person I spoke to early at PT, who said she'd check again with the MF guy who got my question - said he's been traveling. So there might be an answer yet, but does seem like they're insulating their MF people now - they've been hiring and ramping up, for obvious reasons.