Thump's Place FL

For my friends and familys amusement and edification
 
HomeFAQSearchMemberlistUsergroupsRegisterLog in

Share | 
 

 bond funds

View previous topic View next topic Go down 
AuthorMessage
rockhump

avatar

Posts : 1529
Join date : 2008-05-16

PostSubject: bond funds   Sun Jan 12, 2014 10:38 am

Still sitting on too much cash in our IRA's. Pretty well diversified otherwise. I don't really want to throw a lot more money into equities right now so I was looking at a few bond funds. I know you hate bonds but it looks like they trade in a fairly narrow range and a couple produce a decent return.

The 52 week range for BIV is 81- 88 and it's trading at 82 now. It's yield was 3.06 last year.
The 52 week range for HYLD IS 49 - 52 and had a yield of 7.87. This is a high yield fund and I would expect more risk although the beta is pretty small. Just made Morningstar's 5 star rating.

You got any other thoughts? Cash is paying zilch and wondered where I could get a better return for the conservative part of our portfolios.
Back to top Go down
View user profile
Thump

avatar

Posts : 2710
Join date : 2008-05-13
Location : Central Florida

PostSubject: Re: bond funds   Sun Jan 12, 2014 1:19 pm

Zilch without any risk or losses sounds better to me.
We have no bonds right now.

Here's the chart for BIV:


The 3% yield is $2.52.  The fund has lost $6.02 for the year.
High of $88.88 low of $81.11
Looks like a long term trend down with losses for all bond funds.

Didn't bother looking at high yield as the yield isn't near
enough to make up for the risk.  The debt is from the same
companies you're afraid to buy more of or those in much
worse shape than those you might buy.

We're sticking with zilch.
Back to top Go down
View user profile http://www.thumpnet.com
rockhump

avatar

Posts : 1529
Join date : 2008-05-16

PostSubject: Re: bond funds   Sun Jan 12, 2014 2:44 pm

You're probably right. Zilch it is!
Back to top Go down
View user profile
Thump

avatar

Posts : 2710
Join date : 2008-05-13
Location : Central Florida

PostSubject: Re: bond funds   Thu May 08, 2014 4:32 pm

Gonna try and use someone else's article to try and explain better than I can.  I will change them slightly though.  Concerning retirement and not running out of money.  Concerned About Longevity: 4 Mistakes to Avoid

Mistake 1: Holding a Too-Conservative Portfolio

- A too-conservative portfolio--one that emphasizes cash and bonds at the expense of stocks--can actually enhance shortfall risk at the same time it's keeping a lid on short-term volatility.
- Current yields tend to be a good predictor of returns from these asset classes. Not only are starting yields meager in absolute terms--the 10-year Treasury bond is yielding just 2.6% and certificate of deposit yields are barely more than 1%
- Interest rates have much more room to move up than they do down the opportunity for bond-price appreciation during the next decade.
- With returns like that, retirees with too-safe portfolios may not even outearn the inflation rate over time.

************** End Quote ***************

We're holding some cash hoping for a good opportunity to puchase stocks at a good price as we go along and some for if we need to withdraw some money.  No bonds, no bond liability.
If I live to 90 the last money will come out in 20 years and anything I won't take out for over 5 years should be in stocks, hoping for the historical norm of about 10% a year return.  For the next five years and more I expect bonds to lose money.  Not in a straight line but overall.

Just bought Honey some more stocks, so far this year:
________________________________

Filled Buy 50  CBRL  94.2199 12:06:30 04/30/14

________________________________

Filled Buy 100   GE  25.0099  3:06:47 02/10/14
________________________________

Filled Buy 50  CAG  31.0275  10:12:29 02/10/14
________________________________

Filled Buy 50  ADM  38.329  10:46:07 02/05/14
________________________________

Filled Buy 50  HD  77.1272  14:12:44 01/29/14
________________________________

Filled Buy 50  GE  25.0399  10:06:43 01/27/14
________________________________

CAG's down but they all pay dividends and all raise them almost every year.  Makes no difference about the price over a few years,
I just try to get them at a reasonable price now.
Stocks should zigzag up, bonds should zigzag down.
Back to top Go down
View user profile http://www.thumpnet.com
rockhump

avatar

Posts : 1529
Join date : 2008-05-16

PostSubject: Re: bond funds   Thu May 15, 2014 7:37 am

So, I did get in to some bond funds in January. Just seemed better than cash and the 52 week range on these things are tight. They make up less than 10% of our holdings so I'm not banging the table and yelling buy, buy!

Anyway.. My YTD returns and current yields..

RIGS - +.39% and yields 4%
BOND - +2.20% and yields 1.88 %
HYG - +1.21% and yields 5.88%
HYLD - +1.77% and yields 7.48%
Back to top Go down
View user profile
Thump

avatar

Posts : 2710
Join date : 2008-05-13
Location : Central Florida

PostSubject: Re: bond funds   Thu May 15, 2014 10:11 am

Congratulations!  I knew you bought some, don't usually even follow the bond market but have kept an eye on it since.  Great day yesterday for bonds.  But that's trading and I'm even less interested in trading bonds than I am stocks.

It's kind of like the game "Old Maid", if you play long enogh you're going to end up with the old maid.  Bonds have no growth unlike shares of a company.  I'm afraid you're buying high hoping to sell higher, that can work short term but not long term.

And there's the inherent risk of all mutual funds, your fellow shareholders.  Many are likely to buy the fund when it's too high and sell when it gets too low forcing the fund to buy more while it's high and sell to be able to redeem shares when they're too low which is wrong for a good return.
Back to top Go down
View user profile http://www.thumpnet.com
Thump

avatar

Posts : 2710
Join date : 2008-05-13
Location : Central Florida

PostSubject: Re: bond funds   Wed Jun 04, 2014 10:07 am

Bonds have done well this year so far, down a little in the last few days.  I still think they're bad news long term.

I probably am a little biased from life's experience though.
Here's a chart of the 10 year bond 1950 to 1981:



After inflation which is low at this moment:

Back to top Go down
View user profile http://www.thumpnet.com
Sponsored content




PostSubject: Re: bond funds   

Back to top Go down
 
bond funds
View previous topic View next topic Back to top 
Page 1 of 1
 Similar topics
-
» Universal Exports - The James Bond Thread
» James Bond Is A Timelord
» Wonder Under - Steam a Seam -- Heat and Bond
» Playwright Edward Bond
» Actors bond over 'ghar ka khana' on the sets of Reporters

Permissions in this forum:You cannot reply to topics in this forum
Thump's Place FL :: General Discussion :: Anything-
Jump to: