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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
Hiding out is a good way to put it! I too have high cash and they are distributed among stable value fund, ladders of treasuries and CDs. Energy sector funds, ETFs and commodity futures have worked so far but they are volatile. Increased allocation…
New rates on 11/1/22 should be lower. Variable inflation has moderated but fixed rate may be raised above 0%. Estimates are 6.278-7.825%.
That is still higher than long term treasuries without taking on sovereignty and credit risk with emerging ma…
Very insightful data. Tax loss harvesting could account for the switch for large outflow from TRBCX and HCAIX, to VUG.
Question is where does those outflow $ went to when bonds performed poorly this year? Alternatives and treasuries?
Thought everyone, not just you, are having hard time on the equity side. Same goes for most bonds. I thought you are investing in alternatives, and some of which have held up ok. Our MFO contributor, @lynnbolin2021 has a very nice article “black …
Earlier this year I replaced a portion of core bonds with 6 month treasury since they are in the sweet spot for the yield. I built a ladder using the weekly auction ( on Monday) so to capture new treasury as the yields increase; also hold them to ma…
@yogibb, thanks for the summary. Noted that a number of AQR alternative funds such as QMHNX, have done well this year. Even with their investor shares, the investment minimum is $1M for aggregate investors, not so much for individual investors. P…
Good points. That is one reason we favor shorter duration CDs and treasuries. Going beyond a year is a bit too long for us. Money is locked in CD until maturity. A ladder of shorter term CDs will ensure fund will be available periodically.
Ther…
They are yielding a bit higher to compensate for the higher risk (being callable). JPMorgan’s CDs are often callable too. The risk is the interest rates suddenly drop which is unlikely in the next 12 months.
If inflation persist for next several year ( likely > 2% annually). iBond may provide a respectable return when it ties to the CPI.
I am using iBond for my kid’s college education - tax free. Much better than money market of his 529 plan.
…
NATO is preparing themselves just in case the situation worsen.
https://msn.com/en-us/news/world/nato-warns-of-mobilization-of-russian-submarine-belgorod-carrier-of-the-weapon-of-apocalypse/ar-AA12vpsX?cvid=1dcd883973db432a84a066cc0d7ce7bd
@BennyB, the main reasons we made the change were two folds. First, there were no managers quite like Micheal Price (solid return with lower risk). Donald Yacktman came the close. The other was the capital gain tax incurred when we had them in taxa…
Certainly I would welcome higher limit on I-bond.
Bought some 5-yr TIPS at auction earlier this year, and it is losing a bit as the bond price fell. @Devesh explained the unexpected performance in his September article about TIPS and short term T…
You should already see that in money market funds. It was not long ago when they yielded virtually zero % and many are yielding over 2%.
I notice that too with few of my bond funds with higher monthly yields, but that does not make up for their …
Never invested with Heebner; too volatile from one year to another. Micheal price, however, made considerable gain for us (Mutual Beacon and Discovery). We moved on elsewhere after he sold his firm to Franklins back in the 90’s.
Investing in acti…
Terrible last 9- 12 months
It is to be expected when both stocks and bonds are down simultaneously this year. The only bright spot among the TSP funds is the G fund which is a stable value fund and having a positive gain.
Agree with @yogibb. This is a good time to review your mutual funds even though many have not announced their CG estimates.
After the 2008's aftermath, I switched to index funds to minimize the unexpected large CG even in poor years.
Tough to pinpoint. Germany is now buying LPN from the Middle East.
https://al-monitor.com/originals/2022/09/uae-agrees-supply-germany-gas-diesel-scholz-tours-gulf
Natural gas price went up today accordingly. US and Canada potentially can supply …
Natural causes are unlikely. Who would benefit from this? This could shut off all gas flow to Germany. They are getting gas from tankers, and the price is likely to be much higher.
Yes, the total bond index (BND) got hit hard (-1.28%) today, while TRP floating rate bond is down -0.44%. At the same time, the yield of 10 year treasury reached 3.878%, the highest level for this year! And that is a bad omen for bonds. Also energ…
That is for sure. It is a good way to build a ladder.
https://tipswatch.com/2022/09/21/short-term-treasurys-even-more-attractive-now/
To keep up with this inflation, I will pick up more 5 yr TIPs when the auction comes, October 13, 2022.
You got it. At the onset of COVID pandemic, the asset correlation between bonds and equities collapses to near 1.0. If inflation persists, this situation can continue well into 2023.
Even during the internet bubble or GRC, the Fed was cutting rate quickly as the stocks fell and bonds rose. Right now the asset class correlation between stocks and bonds breaks down when they falling simultaneously. Thus bonds (even high quality o…
It is a mechanical problem that cannot easily be fixed by software. My understanding is that detector must rotate from one side of grating mirror to the opposite side in order to change wavelengths. Apparently in the absence of gravity, the instrume…
@orage, you are correct and I have corrected ma earlier post.
@yogibb, I believe this year’s challenge with both stocks and bonds are related to Fed’s quantitive tightening in addition to aggressive rate hikes. The only previous attempt by the Fed…
@carew388, during 2008 the Fed was cutting rates aggressively, but Fed is hiking rates instead. Think the YTD 13% loss of VWINX will worsen by year end. Remember, we still two rounds of rate hike this year.
Investment grade bond index Is down 15…
While it provides a good read for two key parts of the economy, it also serves as reliable indicator of what may be coming down the road. FedEx's earnings contracted in a similar way during the last three recessions — in 2020, 2009, and 2001, accor…
Good idea. 26 weeks treasury is in the sweet spot near 4%, whereas the yields flattens out quickly beyond 2 years. Also the auction is taken place weekly on Monday at brokerages or directly at TreasuryDirect.
After September rate hike, treasury yi…
In addition to better pay, the railroad workers are seeking more flexible work schedule and medical leave. The terms have not been passed by all the workers, but getting through the first step is good.
Federal workers on the hand, are not allow t…
