senecaaa wrote: ↑Sun Dec 15, 2019 2:49 amThe thing is that the managers of TLT also have to sell and buy to keep a steady duration. So they also need to sell at a loss sometimes. They just do it a bit at the time I guess instead of all of it after 10 years.mathjak107 wrote: ↑Sat Dec 14, 2019 5:25 pmThe logic here is flawed about if rates go up ...selling a bond that lost value because rates went up and losing money is no different then selling a losing stock and buying something you think is better .... a loss is a loss and it does not come back ...you just. Hope what you buy next be it another bond or stock does better.
If I sell my Tlt at a loss it means it is because the yield on the fund is higher for new buyers ... if I sell at a loss or even have a loss and buy more Tlt yielding higher that loss stays put ....when you average down the percentage you are down changes but the dollars down stay the dollars down
Losses are never good ...because you buy more of something when it’s down does not make the loss go away .....we can only hope that what we buy or add that is new money goes up enough to offset some of the loss
all you care about is the total return , not how the fund makes the sausage as they say . if that fund performs it's function in the model how the managers do it is up to them .
if rates rise you will see the same losses in a bond ladder as the fund .
after a while perfect becomes the enemy of "good " as you try to encompass every vision of some doom or catastrophe in your head . the end result is the plan gets to complex and to hard to deal with ...
a spouse who has no knowledge at all should be able to take the reins over without worrying about how to form bond ladders or when and how to buy bonds . even having gold stored off shore can be an obstacle to a spouse dealing with things ..
nothing beats simplicity and the more twists and turns and work required the greater the odds perfection will screw up good .
i don't think harry considered a spouse who has to take things over easily in a lot of his "perfection " ideas as he tried to cover all the doom and gloom he could think of . especially in those days when many assets were hard to deal with for someone with no clue .