Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
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Sven
Lynn,
Thank you so much. I am planning on a 3-year ladder since I am a year away from retirement. Lots of spreadsheet work to calculate the income replacement needed. This ladder will create a steady income stream. So thank you for all your help.
I moved back to high quality bond funds this year. Some of which you covered in the SA article. For now, I will stay with agency bonds to the bond ladder. I will pick active managers for corporate bonds.
Sven
Economic indicators are mixed right now. “Skip” is NOT the same as a pause then cutting rates as they made that distinction. Real interesting on trying to read the tea leaves and the possibility of US defaulting.
I will reinvest more 3mo and 6 mo T bills next week as several of them matured earlier this month. As of 5/31/23, 2 yr and 10 yr notes are yielding 4.4% and 3.6%, respectively. More attractive than last year.
More information.
https://fidelity.com/news/article/top-news/202306010621RTRSNEWSCOMBINED_KBN2XN2NI-OUSBS_1?print=true
The moderates on both sides came together to advance the bill.
https://fidelity.com/news/article/top-news/202306010621RTRSNEWSC…
Fidelity will automatically reinvest all distribution (dividend and capital gain), whereas Vanguard requires the owners to specify how to handle the distribution. I make sure all my distribution are reinvested and not to the sweep account. You may …
The debt ceiling deal is not done yet until President Biden signs it. The right hardliners don’t like the proposal and they may vote McCarthy out. Too many balls in the air right now. I recommend to wait until the dust settle.
@Derf, my grandfather served in WWII in Europe. After he returned, he was never the same as many veterans who suffered from PTSD. The movie Saving Private Ryan is a good reminder for those who gave their lives to save the world’s democracy.
Last …
I recall 2011’s downgrade, not even defaulting, brought down the market. This time won’t be easy to get both sides to come together.
Last time, gold shot up and stay there until the debt ceiling resolved.
Somehow this tread got sidetracked to politics. Thanks to @Old_Joe who brought to our attention about State Farm. What I want to point out is that climate change is real and it is here already in our backyard!
Not only it impact our lives but it…
Sometimes I wish Vanguard would adopt Harbor funds model when it comes to choosing their subadvisors. Harbor typically uses a single advisor for each fund, and they get swapped out if they don’t meet their expectation on performance. A single advis…
Many of these funds are widely used in 401(k) and 403(b) plan, especially the institutional shares with low ERs. We have the fortune to use many of them and done quite well.
I think you are right. Baillie Gifford and Jennison are well respected growth managers. So it make sense to have them on this team. Wellington is more of value oriented. So this would be tough to gel with the other growth teams while driving US G…
Good comparison. Someone posted here that DIVI, Franklin International Core Dividend Tilt Index, which also has a comparable 5 year performance record with respect to annual returns, drawdown and Martin ratio (obtained from MFO Premium).
There is more work to do on both sides in selling the compromises. Clock is ticking away as the X-day, June 5th, approaches.
https://msn.com/en-us/news/politics/mccarthy-s-next-challenge-sell-debt-ceiling-deal-in-congress/ar-AA1bNhGH?ocid=hpmsn&…
Thanks for the news. This will impact California’s housing market significantly. Correct me if I am wrong, carrying home owner insurance is a requirement by the mortgage providers. Who is going to cover wildfire hazard now?
Next natural disaster…
“If it’s a long flight, by all means relax and take off your shoes, but there is never a reason to take off your socks. Foot smell is inescapable. Also, keep your feet to yourself.
That is so true that I encountered in my travel. There are those w…
Thank you @davidmoran. A safer withdrawal rate should be less than 4% initially, especially during an off-year like 2022. If inflation remains higher than 2% annually, one needs to increase their stock allocation, say several %.
@Derf, no I did not watch 60 Minutes last night. I recall that defense contractors often charge more than what the original contract cost and they are creative in getting it through. During Regan administration, a toilet seat on an aircraft cost ma…
Think the market is pre-mature to think the FED will pause and pivot right away this year. Strong labor market is counteracting other data indicating a slowing inflation. FED is expecting a mild recession or soft landing.
Good interview overall with many historical perspectives. He is quite bearish and the economy is entering a recession now.
1. He likes things that you need, i.e. consumer staples (food), utilities, and healthcare, not so much things you want.
2. …
The two analysts think there may be another round of rate hike in summer with the high employment rate while other indicators are showing slowing economy.
Concur with @yogibearbull on the risk of short duration bond funds in rising rate environment. Bond price falls as interest rate rises and there is NO hiding place. The same risk is lessen this now now that most of the rate hike is coming to an en…
But the success of TurboTax rests on a shaky foundation, one that could collapse overnight if the U.S. government did what most wealthy countries did long ago and made tax filing simple and free for most citizens."
Many European countries do not r…
Great comments from everyone.
For the reason of being state tax exempt, we invest in treasury over CDs in taxable account. Additionally, we like the liquidity aspect that enable selling treasury before maturity in secondary market, whereas brokere…
Think the defaulting will accelerate the pace of recession and things will get ugly. I will buy bonds of all types as the FED will cut rates quickly. Bond prices will go up while stocks and commodities will be in red.
Have to chuckle a bit. It does take some patience in order to navigate through TD site.
BTW, IRS is setting up online tax filing for free. If they can make the user interface similar to that ofTurboTax, that would be very helpful for those with…
That area is cold and densely forested. Global warming is changing the landscape for the worse and wildfires are now taken place in these locations. This is only May and El Niño weather pattern will bring hotter and drier weather.
Beware of “callable” CDs! When the rate drop below what these CDs initially offered, they will be called back. At that point, you are facing reinvestment risk—that is, the risk of having to reinvest a maturing security at a lower interest rate in …
Totally agree with @hank and @MikeM.
CDs and T bills are still cash equivalents, and I own plenty of them for the time being. They are maturing in coming years, and they will be deploy in bond ladders and bond funds.
Using solely Flex funds without other ETFs and non-Fidelity funds will not work for us. Fidelity will make their money from their 0.35%-1.0% advisory fee. They have made several cold calls, but the timing was premature. I will reach out to them ag…
Excerpt from the article
Big rotation out of commodities, utilities, and into tech stocks — highest since December 2021 — and euro-zone equities
Investors are most long growth versus value stocks since July 2020; survey investors have said only t…
I didn't mention specific financial planning because this particular service was discontinued years ago and I don't know whether a service like this is integrated into Vanguard's current service offering.
So much has changed at Vanguard post-pande…
Same here on the diversification benefit. Also the world is enter a new phase of de-globalization as geopolitical conflicts rise. Some world class companies are located in Europe and Japan. In addition, the oversea stock valuation is quite attracti…
In late 2021, we greatly reduced bond exposure as multiple inflation signs flared up. That saved the misery in bonds through much of 2022 when we turned to CD Treasury ladders.
Right now, FED rate hike cycle is near the end (terminal rate) and li…
Now only 2 more weeks of this manufactured crisis.
I couldn’t agree more. During the 2011’s debt limit debate, the Standard and Poor downgraded US treasury from AAA to AA and all three indexes fell 3-7% on the same days. Most likely this will tri…
