I have a dollop of FALN, downgraded bonds that institutions cant buy. And bogleheads shun. Buy whats hated right? Or am I convincing myself of the narrative...
Buy what’s hated, of quality assets.
What % of your total is in junk?
If the 30 year pops up above 3% later this year, that will give me the chance to swap my taxable 3.125% bond that's gained > 25% and is coming up on the 20 year mark (in 2021) for a new 30 year vintage. That would be quite an increase though...still thinking I'm either going to have to donate that holding to my DAF, or suck up the capital gains tax.
Or, perhaps I could put it into the "variable portfolio" and just enjoy the interest payments. What are all of you guys planning to do with your individually held long bonds when they're no longer long?
sophie wrote: ↑Mon Feb 03, 2020 7:42 am
What are all of you guys planning to do with your individually held long bonds when they're no longer long?
I've done it all wrong so far. Why stop now?
I very well might hold on to mine for an extra year or two, but that's easy because I'm underweight in bonds.
And, I'm underweight, because I sold my worst ones early.
Rationally you hold if you are carrying something that yields higher than the replacement. There are no interest change scenarios where replacing them does better financially. Eventually as the bonds age that could change, but not for a while.
Kbg wrote: ↑Wed Feb 05, 2020 6:46 am
Rationally you hold if you are carrying something that yields higher than the replacement. There are no interest change scenarios where replacing them does better financially. Eventually as the bonds age that could change, but not for a while.
Of course, that’s the opposite of Harry’s advice. You replace the bonds regardless of the fact that the new ones pay less yield, because you need that duration. And you do that by selling what you have if it’s only got 20 years on it. Thank heavens there’s a vp.
Who was it, 6Iron maybe, who said, “I feel like a complete idiot (selling these bonds and buying news ones at these low interest rates).” That was already a few years ago, and the 30-year-yield was higher than the current 2%.
I have some zeroes that are supposed to reach value x in the year 2033, but they're getting close to x now. No point in holding on to zeroes (i.e. payments have been STRIPPED), right?
dualstow wrote: ↑Fri Feb 21, 2020 2:11 pm
I have some zeroes that are supposed to reach value x in the year 2033, but they're getting close to x now. No point in holding on to zeroes (i.e. payments have been STRIPPED), right?
Holy crap, 10 year treasury finally hits new record low in yield. 30 year hits record low yield 2 days in a row. If the stock correction continues this could be a great time to opportunistically "rebalance" some profits from gold/long bonds back into stocks before the Fed starts capitulating and buying the market back up again.
The volume of market activity is too high for that kind of manipulation. I it were attempted it would have to be on a scale that could not be camouflaged.
1.03% on the 3 month. .77% on the 2 year. 1.04% on the 10 year. 1.64% on the 30 year. So crazy. At least they uninvited the 90/10 and 2/10 that are most widely followed. But still some pretty extreme inversions on the short to medium range.
The 10 yr T bond has broken below 1%. I said it before and I stand by it. The bond market no longer inhabits the same plane of reality that I am living in.
Where I'm at there is a CU offering a 2.25 15 year loan...put in my loan application last night. This cuts a 1.25 off my current 30 yr. What's crazy is I read something this morning saying they could go lower!
pmward wrote: ↑Fri Mar 06, 2020 9:04 am
I'm rebalancing a couple percent of bonds back into stocks today.
Did you hit a band, or are you just taking advantage of the recent swings? As of yesterday, my LTT's are still only at 28%.
I generally go more by feel for rebalancing, I'm ~2.5% over allocation on bonds (maybe more after prices are updated on my LTT's this evening), and about equally under on stocks. I'm really tempted to rebalance, because in my trading days anytime I had a ridiculous up day like this and held on to a trade I regretted it. At the same time though, I do believe we have another down leg coming in stocks... and I do think there is a possibility of a 30% correction, which would place us right around those December 2018 lows... and I would love to back the truck up on a big rebalance there. So maybe I should let my winners run and sit on my hands a bit, even though doing so has always bitten me in the past? I'm torn. My initial gut feeling says to rebalance now, but my second thought says to be patient.