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may be because if an issuer default, the equity goes to zero and the bond is getting paid, at least partially, and the average recovery for the bond investors is 60%? you didn't really think that bonds and equities are truly the same, did you?
Reply to @Old_Joe: what are other "safe" (i.e. not correlated to equities) assets out there when you need to offset risk? the choices, especially those that are liquid and tradeable, are very limited. they are long term treasuries and gold.
hi bee... you're doing what we are doing in our clients' porfolios.. we are overweight risk in terms of credit exposure (hy) and emerging markets, but we "hedge" that via being long duration. long term treasurys made the risk taking a bit less bloo…
Reply to @Old_Joe: Hi OJ... first of all, TIPs are adjusting in parallel with long term treasuries, which have been on the roll... Second, inflation expectation for 10 years and out have not really changed and are still @ 2+ rate. So the answer is …
added to existing equity mutual and closed-end funds at the expense of bonds and cash. Added to preferreds and munis in CEF format, which provided great discounted entry points and good yield.
Reply to @BobC: "I don't know why anyone should own a long-term, long-only U.S. government bond fund". Insurance companies and pension funds will always have long duration government debt funds to match their liabilities.
Reply to @mobryon: since you're quoting from seekingalpha, please search for dan plettner. he dedicated many articles to MLPs in different structures, and each and everyone structure has its own drawbacks. K-1s are NOT the issue -- deferred tax li…
agree with investor. the issue is more technical.. but MLP s should not be entered into via ANY fund vehicle, either open end, closed-end, ETF or ETN -- all have various tax issues which drastically reduce the benefit for the shareholder. If you li…
Reply to @mobryon: i beg to differ. There are truly market-neutral offerings. They might not be in traditional 40'Act funds, but it is a fairly large category. The pricing is different and so is investor eligibility, but these are true zero beta …
Reply to @mobryon: that is truly confusing.. the name states market-neutral (close to zero beta); you're saying 130/30 (100% net market exposure) and comparing with long/short, which is yet another classification. what is TFSMX then?
Reply to @David_Snowball: we've had an infrastructure fund for several years now... quite illiquid, hard to value (you're investing in operating companies), PE-like investment with not so impressive returns. i would NOT suggest one. capital losses…
well. MM funds are treasury bills and government can't borrow. i dunno. i am staying put, but if you want to react, just go to cash -- and i mean insured cash deposit at a bank, not a MM fund which suddenly can't roll its 3-6 months bills.
on t…
this seems like a market timing strategy based on the quant model. it is not GTAA or in any way fundamental. There are plenty of quant strategies, but i don't know of any also doing market timing. i believe lots of research show that long-term mar…
Did any of your clients bail out of NEARX? I recall you held the fund in lieu of cash for its stable NAV. I would assume that Sep-Feb extreme volatility created some headwind for this "cash replacement". I would appreciate a frank response.
i see. usually, if you buying something really low, your dividend yield at your cost basis could indeed be very high. however, as your porfolio appreciates to a more normal level, the dividend yield goes down and you record your appreciation as unr…
it doesn't matter which "black swan", BRBond. what matters is that in time of crisis, all risk assets go down. so your solar flare ETF (provided you found one) will go down as well. the few choices are: the long-dated put options that are continuo…
Very interesting stuff, PS -- thanks for sharing. My only comment is that asset allocation works long-term, over the cycle, and fluctuations in any given year will always be there, for any asset class. so your vanguard short-term fund had probably…
Skeeter, could you please explain how you get a portfolio yield of 5%+ with the listed asset allocation? If i generously assume cash is yielding 1%, (and so is "other" whatever it is), income -- i assume fixed income -- even if most is in junk and …
the "talk", if i may, is more about absolute yields being record low, not the spreads. the spreads correctly reflect the expected default rate of betw 2 and 3 percent.
i did go for the more expensive weber version with a good cover a few years back, but my husband uses it year round (except for extreme snow). i totally agree with you waiting for august discount -- i bought ours @ 30% off. However, it was the las…
Thanks for the kind words, Cathy. I don't have a strong opinion on the asset class currently. It has been overpriced recently as the commenter BRBond pointed out. it is now probably better priced, with some real opportunities. You need to trust …
These are good questions to be asking BEFORE investing in these funds, not after. Yes, Cathy, these are the same securities, only they have been purchased already at prices reflecting the decreased cash flow/ increased default, etc. etc. So -- i ce…
i don't believe this is true, Nick. Please check with her. She can't use brokers except for those approved by her employer, but she could hold mutual funds directly with mutual fund companies. you don't have to open a brokerage account to buy a m…
hi mark/catch. HY dismal recent performance is not due to Greece. It is due to the slowing US economy and, even more so, due to the technical factors. Fed came to the market recently to sell billions of dollars of mortgage-backed securities they p…
