The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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dualstow
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Re: The Bond Dream Room

Post by dualstow » Sun May 06, 2018 8:36 am

Sophie,
It’s not that I anticipate losses, though I guess I feel I avoided some. I just don’t think the ratio of risk/protection suits me right now. I’m not dissolving the rest of the pp. However, I’ll surrender that protection for now, and I’ll get pretty good yield on shorter term notes.

Again, I know it’s not supposed to be about yield.

If we go into 30 years of deflation and I only have this small batch of long bonds left, I’ll be ok.
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Re: The Bond Dream Room

Post by hardlawjockey » Tue May 08, 2018 6:26 pm

These are the times that try men's souls.

Or maybe not. I vowed not to look at my portfolio for a year back in January and so far I've been successful.

Funny thing is I know that almost all of the long bonds (held directly) I have in my portfolio still have a higher yield than what shows up on the ticker screen when I watch Fox Business. So it will be curious how that plays out at the end of the year.
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dualstow
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Re: The Bond Dream Room

Post by dualstow » Tue May 08, 2018 8:53 pm

The bonds I still have sport good yields. It’s easy to hold them.
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Re: The Bond Dream Room

Post by barrett » Fri May 11, 2018 3:18 pm

dualstow wrote:
Sun May 06, 2018 8:36 am
Sophie,
It’s not that I anticipate losses, though I guess I feel I avoided some. I just don’t think the ratio of risk/protection suits me right now. I’m not dissolving the rest of the pp. However, I’ll surrender that protection for now, and I’ll get pretty good yield on shorter term notes.

Again, I know it’s not supposed to be about yield.

If we go into 30 years of deflation and I only have this small batch of long bonds left, I’ll be ok.
As of the end of the day today, the one-year rate is 2.28% and the 30-year rate is 3.10%. Not sure what to make of this flattening curve but I feel the same way, dualstow.

Of course, if we do go into a deflation that really does last more than, say, ten years, we'd be forced to sell our long bonds and exchange them for super-low yielding 30-year notes.
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Re: The Bond Dream Room

Post by ochotona » Wed May 16, 2018 3:33 pm

I'm really waiting for the 10-to-30 year buying opportunity. Dare I dream it, even in the Bond Dream Room? Buy at 4% then get more QE?
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sophie
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Re: The Bond Dream Room

Post by sophie » Thu May 17, 2018 7:03 am

So besides dualstow, what are all of you doing about bonds?

I stopped auto-investing in long bonds but plan to keep what I have and let the percentage drift down while I keep collecting interest payments. Two things will have to happen before I jump back into buying long bonds: 1) the Fed needs to stop talking about raising rates, and 2) the international investors buying 30 year bonds need to wake up, notice the flat yield curve, and rush into shorter durations.
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Re: The Bond Dream Room

Post by pugchief » Thu May 17, 2018 7:26 am

sophie wrote:
Thu May 17, 2018 7:03 am
So besides dualstow, what are all of you doing about bonds?

I stopped auto-investing in long bonds but plan to keep what I have and let the percentage drift down while I keep collecting interest payments. Two things will have to happen before I jump back into buying long bonds: 1) the Fed needs to stop talking about raising rates, and 2) the international investors buying 30 year bonds need to wake up, notice the flat yield curve, and rush into shorter durations.
I started putting most of my bond money into intermediate treasuries ala Desert over a year ago. But I find the question odd, as I doubt anyone would be asking that question EVER about stocks, no matter how lofty valuations got. So I guess I am a PP hypocrite like most of the rest of you. ???
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sophie
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Re: The Bond Dream Room

Post by sophie » Thu May 17, 2018 7:36 am

Well, the issue is that there is a bureaucracy (the Fed) whose job it is to manipulate the bond market, and they're actively doing so. No such organization exists for stocks.

However you're right...I've just joined the "PP hypocrite" club I guess. I'm still keeping enough bonds to be in balance though.
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Re: The Bond Dream Room

Post by dualstow » Thu May 17, 2018 7:46 am

sophie wrote:
Thu May 17, 2018 7:36 am
However you're right...I've just joined the "PP hypocrite" club I guess. I'm still keeping enough bonds to be in balance though.
Keeping enough- does that include buying more if it drops below 15%?
I'm at 15% right now.
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Re: The Bond Dream Room

Post by Kriegsspiel » Thu May 17, 2018 8:46 am

I haven't bought bonds in years. Back when I was working I'd buy the lagging asset. Now that I'm going back to work I'm going to accumulate cash until I need to rebalance.
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Re: The Bond Dream Room

Post by buddtholomew » Thu May 17, 2018 10:57 am

That’s what kills me about this forum...
I say what everyone is thinking and also doing and get berated...
If everyone is so happy with the PP why aren’t you sticking to the plan?
Tell me.
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Re: The Bond Dream Room

Post by dualstow » Thu May 17, 2018 11:49 am

buddtholomew wrote:
Thu May 17, 2018 10:57 am
That’s what kills me about this forum...
I say what everyone is thinking and also doing and get berated...
If everyone is so happy with the PP why aren’t you sticking to the plan?
Tell me.
I'm not thrilled with the performance of the pp right now, but I also am not ready to give up on it.
None of my assets are out of the rebalancing bands, and if I let them breach a band, I'll say so.
I don't expect gold and long bonds to go up just because stocks are down, on the same day that they go down.
These are trying times, for sure, but it's just not productive to complain on a daily or hourly basis.
And, even if I *do* eventually leave the pp behind, it will be without any regret. I'm not losing money. The portion of my holdings that constitute the pp are doing just fine as a complete package.

You know it's entirely possible that gold will soar in the future but many of us were afraid to stock up while it was on sale (now).
It's also quite possible that long term rates will not follow short term rate rises. Nobody knows nothin'.

All is well, Budd. Just chill, enjoy life, put money away for the future.
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