The Bond Dream Room

[dualstow]

Very interesting to watch it all play out!
I have no regrets jettisoning my "bad" long-term bonds, but I feel comfortable leaving the rest alone.

[dualstow]

I now have a little regret. Even the worst of my bonds would probably have a 5% gain by now. At least I put the proceeds into cash and not gold.

[pmward]

Yeah, TLT hit the highest level to day since Oct 2016. Only 6% away from all time highs.

[Ad Orientem]

The yield on the 10 yr T Note is now more or less the same as the yield on the S&P 500. If I were speculating, I'd be looking at dividend paying stocks as a better long term bet than bonds. Maybe VIG.

[pmward]

The yield on the 10 yr T Note is now more or less the same as the yield on the S&P 500. If I were speculating, I'd be looking at dividend paying stocks as a better long term bet than bonds. Maybe VIG.

I have some hesitations on dividend stocks as well. Look at the P/E ratios. They are historically high. They are no longer "value" stocks. There is more risk there than in the past. One needs to keep this in mind. They are getting paid to take risk.

[dualstow]

Hmm. I’ve been holding dividend-raising stocks since forever, and while I don’t consider that to be speculation, I have to acknowledge all the news reports of people piling into these stocks for yield, setting them up for a big fall. Maybe it’s time to trim, but I have held them through other crashes.

It’s good to get paid while you wait.

The yield on the 10 yr T Note is now more or less the same as the yield on the S&P 500. If I were speculating, I'd be looking at dividend paying stocks as a better long term bet than bonds. Maybe VIG.

I have some hesitations on dividend stocks as well. Look at the P/E ratios. They are historically high. They are no longer "value" stocks. There is more risk there than in the past. One needs to keep this in mind. They are getting paid to take risk.

[pmward]

Hmm. I’ve been holding dividend-raising stocks since forever, and while I don’t consider that to be speculation, I have to acknowledge all the news reports of people piling into these stocks for yield, setting them up for a big fall. Maybe it’s time to trim, but I have held them through other crashes.

It’s good to get paid while you wait.

I personally wouldn't worry about it if I had already purchased them long ago and had a large profit. I mean, they may be close to paying for themselves by now. However, I wouldn't personally throw fresh cash into these at the moment. Dividend stocks and large cap tech are the two sub-types of stocks that have accounted for most of the gains since 2008. Every time the cycle turns the bear market does hit the winners of the past bull harder than the rest, and the last bull winners rarely are the new bull winners. Just some food for thought.

[Xan]

Is there really a difference between buying fresh and holding? (I'm assuming transaction fees are negligible.)

[dualstow]

Oh yeah, they are up an average of 135% not including the dividend payments. No match for the S&P I’m sure, but the dividends are serving their purpose.

Hmm. I’ve been holding dividend-raising stocks since forever, and while I don’t consider that to be speculation, I have to acknowledge all the news reports of people piling into these stocks for yield, setting them up for a big fall. Maybe it’s time to trim, but I have held them through other crashes.

It’s good to get paid while you wait.

I personally wouldn't worry about it if I had already purchased them long ago and had a large profit. I mean, they may be close to paying for themselves by now. However, I wouldn't personally throw fresh cash into these at the moment. Dividend stocks and large cap tech are the two sub-types of stocks that have accounted for most of the gains since 2008. Every time the cycle turns the bear market does hit the winners of the past bull harder than the rest, and the last bull winners rarely are the new bull winners. Just some food for thought.

[dualstow]

Is there really a difference between buying fresh and holding? (I'm assuming transaction fees are negligible.)

The transaction fees are free these days, or $2 if I trade too much, which I don’t. Back when I started, though, they were a bit pricey. Just a few trades a year back then.

As for the first question, which I guess is a response to pmward, I think it’s largely psychological/“mental accounting.”
What is different, though, is the tax bill. To hold on means no taxes (even on the dividends). To sell would be expensive, although I do get rid of one now and then, tax bill be damned. If the dividend stalls, I consider selling, and if the dividend is cut, I always sell.

Though these are in the vp, I pay attention to the stock/bond ratio there, too.

[pmward]

Is there really a difference between buying fresh and holding? (I'm assuming transaction fees are negligible.)

In a dividend ETF yes, simply because it will eventually pay for itself. I mean if you're holding shares that have paid out 80% of their purchase value, not including massive capitol gains over the last decade, who cares if they drop 50 or 60%? Especially since they will keep paying their dividend. One could definitely sell and route the capital to something with more upside / less downside, but generally speaking the people that purchase dividend ETF's tend to do so for a specific reason (the dividend), so I think that selling would not be necessary especially since bond yields are so weak right now (and probably going lower). Fixed income is turning into fixed expense. So there isn't a lot of other options for people that want income right now.

[pmward]

And TLT is now less than $1 from it's all-time high. My did that escalate quickly!

[ochotona]

TLT is kinda nuts. I have a tight trailing stop alarm, I might sell some and try to re-buy it lower... just for fun

[pmward]

TLT is kinda nuts. I have a tight trailing stop alarm, I might sell some and try to re-buy it lower... just for fun

Yeah, this is strange, to have gold and bonds skyrocketing like this, and stocks surprisingly holding up. Part of me says something has to give, one of these has to pullback. Stocks are starting to get volatile so I'm thinking it's going to be them. But man, who knows. All markets are simply nuts right now. Sense left the building long ago.

[ochotona]

My portfolio is up 0.36% today. On a bad stock day like today, I'm not complaining, but I wonder where it goes from here...

[dualstow]

It’s timely that Medium Tex came by.
I can’t remember what year it was, but I was in a hotel watching massive fires in Birmingham (UK) on TV, and gold and bonds were way up. Regarding the low long bond yields, Medium Tex said “this is when a game of tennis becomes a game of ping pong.”
Well, it feels like ping pong time again.

[pmward]

And we officially have the 2nd highest closing ever for TLT. On Jul 8 2016 we closed at 143.60, and that is the only date with a higher close. And it is up after hours. Insanity.

[Kriegsspiel]

In the spirit of Libertarian666, I'd like to take credit for this boom in bonds, as I sold a few immediately prior to the huge jumps recently. That is all, you're welcome.

[pmward]

Thanks Kriegs!

[dualstow]

In the spirit of Libertarian666, I'd like to take credit for this boom in bonds, as I sold a few immediately prior to the huge jumps recently. That is all, you're welcome.

Might turn out to be a prescient decision.

[dualstow]

Looks like we could be in for another pp-friendly day.

https://imgur.com/a/BMouofa

I snapped the pic linked above a couple of days ago but was unable to upload it from my tablet.

{Edited for grammar}

[whatchamacallit]

Fun perspective.

Record set on 30 year us bonds:

https://www.nytimes.com/1982/02/05/busi ... bonds.html

[pmward]

Fun perspective.

Record set on 30 year us bonds:

https://www.nytimes.com/1982/02/05/busi ... bonds.html

Ding ding, all time highs. So much for all those people that were convinced the bond bull was dead and that yields had nowhere to go but up.

[Xan]

Fun perspective.

Record set on 30 year us bonds:

https://www.nytimes.com/1982/02/05/busi ... bonds.html

Ding ding, all time highs. So much for all those people that were convinced the bond bull was dead and that yields had nowhere to go but up.

Greenspan says 0% is just a number:
https://www.marketwatch.com/story/ex-fe ... 2019-08-13

[pmward]

Fun perspective.

Record set on 30 year us bonds:

https://www.nytimes.com/1982/02/05/busi ... bonds.html

Ding ding, all time highs. So much for all those people that were convinced the bond bull was dead and that yields had nowhere to go but up.

Greenspan says 0% is just a number:
https://www.marketwatch.com/story/ex-fe ... 2019-08-13

Yeah I saw that. And with the Fed not editing out discussions on negative interest in their minutes, and their changing of language from "zero lower bound" to "effective lower bound" (of which "effective lower bound" is speculated to be in the realm of -10%) I would say that it feels like they are preparing us for negative rates. It feels an awful lot like how Bernanke discussed QE a long time prior to actually implementing it. I hate to say it, but they are showing us their hand.