The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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buddtholomew
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Re: The Bond Dream Room

Post by buddtholomew » Tue May 29, 2018 11:29 am

Classic...I thought my TLT purchased at 118 was dead money...
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Re: The Bond Dream Room

Post by dualstow » Tue May 29, 2018 12:35 pm

heh heh O0
RIP Marcello Gandini
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ochotona
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Re: The Bond Dream Room

Post by ochotona » Tue May 29, 2018 1:36 pm

The purpose of markets is to confuse and embarrass.
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dualstow
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Re: The Bond Dream Room

Post by dualstow » Tue May 29, 2018 4:30 pm

ochotona wrote:
Tue May 29, 2018 1:36 pm
The purpose of markets is to confuse and embarrass.
The one in-the-red bond I had is in the black. I am certainly confused (permanently, not simply today). I should probably leave my remaining long bonds alone.
RIP Marcello Gandini
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Re: The Bond Dream Room

Post by Cortopassi » Tue May 29, 2018 6:53 pm

I know that's why I got in the PP. Whenever I tried to guess, educated or not, the direction of anything, 90% of the time it went the other way.
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Ugly_Bird
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Re: The Bond Dream Room

Post by Ugly_Bird » Tue May 29, 2018 8:37 pm

buddtholomew wrote:
Tue May 29, 2018 11:29 am
Classic...I thought my TLT purchased at 118 was dead money...
"This portfolio is terrible. Anyone believe me now?" (c) buddtholomew
:P
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buddtholomew
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Re: The Bond Dream Room

Post by buddtholomew » Wed May 30, 2018 10:37 am

Ugly_Bird wrote:
Tue May 29, 2018 8:37 pm
buddtholomew wrote:
Tue May 29, 2018 11:29 am
Classic...I thought my TLT purchased at 118 was dead money...
"This portfolio is terrible. Anyone believe me now?" (c) buddtholomew
:P
Every dog has his day in the sun.
I think that was yesterday for the 4x25PP, today GB and risk parity (weighted to equity) a little better so far.

Point taken >:D
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dualstow
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Re: The Bond Dream Room

Post by dualstow » Wed May 30, 2018 12:28 pm

That was just baddtholomew. This is gooddtholomew.
RIP Marcello Gandini
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Re: The Bond Dream Room

Post by boglerdude » Fri Jun 08, 2018 2:36 am

Intermediate-Term Corporate Bond ETF
4% and a risk level of 2

https://investor.vanguard.com/etf/profile/VCIT

hm
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Re: The Bond Dream Room

Post by Kbg » Mon Jun 11, 2018 1:28 pm

I'm a fan of VCST...
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dualstow
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Re: The Bond Dream Room

Post by dualstow » Mon Jun 11, 2018 2:01 pm

I've owned VCIT for a few years and had no idea what the recent yield was. Nice.
- - -
By the way, Vanguard seems to be going in the same direction as bank websites: a big stupid screen that looks ok on a phone but not as good as it used to on a desktop monitor. And, some columns have been removed, like the Distribution yield (under the Distributions tab).

Well, there is more than one way to look at transactions, and at balances & holdings, perhaps because they are still in transition. But, the way I am looking at it now- big stupid screen and no distribution yield.
RIP Marcello Gandini
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Re: The Bond Dream Room

Post by Tortoise » Mon Jun 11, 2018 10:26 pm

No big stupid screen, me no looky. No big shiny buttons, me no clicky.
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Re: The Bond Dream Room

Post by Kriegsspiel » Tue Jun 12, 2018 1:32 am

Yea the default Vanguard look is dumb. I click on the drop down menu at the top to look at their old style.
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Re: The Bond Dream Room

Post by ochotona » Wed Jun 13, 2018 6:11 am

DoubleLine thinks 10 year going to 6% in a few years. Oil to $90. Recession risk 2020.
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Re: The Bond Dream Room

Post by Cortopassi » Wed Jun 13, 2018 9:32 am

ochotona wrote:
Wed Jun 13, 2018 6:11 am
DoubleLine thinks 10 year going to 6% in a few years. Oil to $90. Recession risk 2020.
Then I will quit the PP and put everything into CDs... :)
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Re: The Bond Dream Room

Post by ochotona » Wed Jun 13, 2018 12:33 pm

Cortopassi wrote:
Wed Jun 13, 2018 9:32 am
ochotona wrote:
Wed Jun 13, 2018 6:11 am
DoubleLine thinks 10 year going to 6% in a few years. Oil to $90. Recession risk 2020.
Then I will quit the PP and put everything into CDs... :)
Me too!
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Re: The Bond Dream Room

Post by dualstow » Wed Jun 13, 2018 1:03 pm

Good point, pug. Well, the Fed just raised rates.
Stay tuned to my sig line for any breaking news. O0
RIP Marcello Gandini
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Re: The Bond Dream Room

Post by Dieter » Wed Jun 13, 2018 2:01 pm

If 10yr to 6% I might have a hard time reballancing into LTT....
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Re: The Bond Dream Room

Post by Tortoise » Wed Jun 13, 2018 10:49 pm

MangoMan wrote:
Wed Jun 13, 2018 12:56 pm
The only way 10y is going to 6% is if inflation is over 5%. Unlikely. And if it is, you will still want the PP.
Aren’t rising home prices, medical expenses, and college tuition a form of inflation?
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Re: The Bond Dream Room

Post by ochotona » Thu Jun 14, 2018 4:58 am

Tortoise wrote:
Wed Jun 13, 2018 10:49 pm
MangoMan wrote:
Wed Jun 13, 2018 12:56 pm
The only way 10y is going to 6% is if inflation is over 5%. Unlikely. And if it is, you will still want the PP.
Aren’t rising home prices, medical expenses, and college tuition a form of inflation?
And rising asset prices?
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Re: The Bond Dream Room

Post by eufo » Mon Jun 25, 2018 4:49 pm

Yay for bonds today! Lol
Don't agree with me too strongly or I'm going to change my mind
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ochotona
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Re: The Bond Dream Room

Post by ochotona » Tue Jun 26, 2018 1:27 pm

Schwab thinks yields may've peaked on the long end, though the short end may keep going up.

https://www.schwab.com/resource-center/ ... off-lights

"Duration outlook

We have favored keeping the average duration in portfolios in the short-to-intermediate range to mitigate the negative impact of rising rates. Now that longer-term yields have reached 3%, we’ve debated suggesting investors start to add some duration to portfolios. However, we aren’t quite ready to make that call. The economy is growing at a healthy pace and inflation expectations, which are central to bond yields, are still rising. In addition, the Treasury’s borrowing needs are rising due to the tax and spending bills passed earlier in the year, while the Fed is simultaneously reducing its buying, leaving more to be financed in the market.

Until there are signs of slower growth or rising risk aversion, we continue to favor maintaining average portfolio duration in the short to intermediate term, but we’re getting closer to a stage in the business cycle where modestly extending the average duration will begin to look more attractive. For now, the risk/reward trade-off in the yield curve looks most attractive in the two- to five-year range."

Great minds think alike, I was wondering the same myself recently.
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Re: The Bond Dream Room

Post by Cortopassi » Tue Jun 26, 2018 1:43 pm

Here's what I'm thinking lately. As we've discussed, you can't take individual allocations in a vacuum, or you might drive yourself nuts watching one or more go down, seemingly forever (bonds and gold anyone???).

If you stick by Harry's original 25/25/25/25, and the 10%/40% rebalancing bands, here's the pain that must be endured, assuming you rebalanced at the beginning of the year and are waiting for a 10% band (40% drop). This assumes the other allocations in the portfolio have held steady.

Gold, 1/1/2018: ~$1312/oz.
--40% drop to reach rebalance band, gold would need to hit $787
TLT, 1/1/2018: ~125.50/sh
--40% drop to reach rebalance band, TLT would need to hit $75.30

When I look at those numbers, I'm not entirely sure the PP would save me from myself, which worries me. I cannot imagine gold dropping to $787. And pulling the trigger to buy at that level, while logically seems a no-brainer, I'm sure at the time would seem like lighting cash on fire.
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ochotona
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Re: The Bond Dream Room

Post by ochotona » Tue Jun 26, 2018 2:01 pm

My what big rebalancing bands you have. Where did 10/40 come from ?
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Re: The Bond Dream Room

Post by Dieter » Tue Jun 26, 2018 3:03 pm

ochotona wrote:
Tue Jun 26, 2018 2:01 pm
My what big rebalancing bands you have. Where did 10/40 come from ?
That's the standard 15% lower bound.

A 40% shave from 25% gives 15%.

[Edit: ah, the math showing drop used 40%, but missed that 10% band... If 10% of portfolio is lower band, would need a 60% drop in asset value if everything else stayed the same, whole examples used 40% drop......]
Last edited by Dieter on Tue Jun 26, 2018 3:12 pm, edited 1 time in total.
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