Gyroscopic Investing

jhogue wrote: ↑Sun Jul 01, 2018 7:40 pm See "Treasury Bond Buying Tutorial," the first thread under "Bonds"

or:

viewtopic.php?f=3&t=1670

jhogue wrote: ↑Sun Jul 01, 2018 7:40 pm See "Treasury Bond Buying Tutorial," the first thread under "Bonds"

or:

viewtopic.php?f=3&t=1670

ochotona wrote: ↑Tue Jul 03, 2018 5:57 pm Marilyn Cohen, "The Little Bond e-Book"

jhogue wrote: ↑Wed Jul 04, 2018 1:04 pm Let the buyer beware! Marilyn Cohen is promoting the sale of municipal and corporate bonds in this book. These are not suitable for the HBPP.

1. Anyone tempted to buy munis because they are free of federal, state, and local taxes should read up on Puerto Rico and Chicago or ask pug chief for a tutorial on fiscal finance in the Land of Lincoln.

2. As for corporate bonds, about 20 years ago, I took Marilyn Cohen's advice (she writes a bond column for Forbes) and bought some really neat GMAC zero coupon bonds with a coupon of 7.65%. They tanked during the 2008-2009 recession, and while I eventually got out at a profit, it was a wild ride while GMAC was being bailed out by TARP and then converted into Ally Bank. Trust me, you don't want to go for that ride. Bonds should be boring, not exciting.

jhogue wrote: ↑Wed Jul 04, 2018 2:19 pm Yeah, I know.

My caveat emptor about munis and corporate bonds applies to holders of VPs as well as more orthodox holders of the HBPP.

Are you recommending investors buy munis and corporate bonds?

ochotona wrote: ↑Sat Jul 28, 2018 7:24 pm FYI, this is where I am now:

10% cash (90 day T-Bills, Ally Bank)
10% gold
10% TIPS (I put I-Bonds in the TIPS bucket)
25% core bonds with 4 year duration (Treasuries, Total Bond Market, Short Term High Quality Corporates - no junk, no EM, no preferreds)
45% GEM

This is sleep well at night portfolio for sure.

HappyMan wrote: ↑Sat Jul 28, 2018 10:34 pm Nice allocation! Keep thinking why did you chose 3-4 year bonds over, for example, 1 year or 10 year ones?

ochotona wrote: ↑Sun Jul 29, 2018 5:45 am
My criterion was: how much can I tolerate losing, emotionally, if interest rates were to rise? That's why I chose that duration. It's my pain threshold. Through the long bond fluctuations I have not had much discomfort, and on a point-forward basis, 4 year bonds are in the meaty, juicy part of the yield curve.

When GEM goes out of stocks, I may lengthen, however, anticipating more QE.

ochotona wrote: ↑Tue Jul 31, 2018 5:15 pm Very important content from Gary and others. A must-read. This suggests dual momentum portfolios outperform in retirement.

https://www.dualmomentum.net/2018/07/mo ... t.html?m=1

ochotona wrote: ↑Fri Aug 03, 2018 5:53 pm I can dream, right?

The GEM pops out of stocks in 2019
Just as the 10 year Treasury hits 4%
Just as gold dives under $1000 because of the strong Dollar due to 4% bond yields

I rebalance gold back up to 10%, dump my stocks and go to bonds, and my retirement plan will work OK with 4% CAGR so who cares if no stocks?

After three years, in 2022, I buy back into the S&P500 at 1000. In the meantime, the banks did more QE, so my bond holdings have appreciated.

By 2026, my portfolio has doubled. I retire. The wheels fall off of the US Dollar due to trillion dollar deficits, gold goes to $5000 per ounce. Because I converted my IRA to Roth IRA, I escape most of the massively increased taxes needed to pay for Boomer retirement benefits.

I can dream, right?