The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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pmward
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Re: The Bond Dream Room

Post by pmward » Tue Aug 27, 2019 4:22 pm

And we have another all-time high close in TLT. This bond rally just doesn't want to quit.
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Ad Orientem
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Re: The Bond Dream Room

Post by Ad Orientem » Tue Aug 27, 2019 5:05 pm

30 yr Treasury currently yield 1.95%
VOO current dividend 2.03%

Not seen that in a very long time.
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pugchief
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Re: The Bond Dream Room

Post by pugchief » Tue Aug 27, 2019 8:13 pm

Ad Orientem wrote:
Tue Aug 27, 2019 5:05 pm
30 yr Treasury currently yield 1.95%
VOO current dividend 2.03%

Not seen that in a very long time.
And that's supposed to indicate that stocks are a screaming BUY.
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ochotona
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Re: The Bond Dream Room

Post by ochotona » Wed Aug 28, 2019 8:06 am

I'm just not getting excited about putting new money into TLT right here...

https://i2.wp.com/northmantrader.com/wp ... .png?ssl=1

For years and years, after TLT has hit the top of that trend, 6, 12, or 18 months later, investors were regretting buying at the peak.
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sophie
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Re: The Bond Dream Room

Post by sophie » Wed Aug 28, 2019 8:20 am

Eh, that's what I was saying to myself when the 30 year yield was 2.5%.

Speaking of which, anyone hit a rebalance band yet?
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Ugly_Bird
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Re: The Bond Dream Room

Post by Ugly_Bird » Wed Aug 28, 2019 8:31 am

sophie wrote:
Wed Aug 28, 2019 8:20 am
Speaking of which, anyone hit a rebalance band yet?
After this LTT and Au surge, mine is pretty well balanced now :-)
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Kbg
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Re: The Bond Dream Room

Post by Kbg » Wed Aug 28, 2019 8:38 am

In some other stuff I read, supposedly the gap between US interest rates and the rest of the world is projected to close and hence the movement in i-rates down.
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Re: The Bond Dream Room

Post by dualstow » Wed Aug 28, 2019 9:04 am

sophie wrote:
Wed Aug 28, 2019 8:20 am
Eh, that's what I was saying to myself when the 30 year yield was 2.5%.

Speaking of which, anyone hit a rebalance band yet?
I might have if i hadn’t stupidly sold my “worst” bonds in 2018. With bonds up so much but still underweight in my allocation due to the sale, I guess I have to leave it alone.

Certainly not complaining though. It’s nice to see all four assets well in the black. O0
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Re: The Bond Dream Room

Post by pmward » Wed Aug 28, 2019 11:37 am

ochotona wrote:
Wed Aug 28, 2019 8:06 am
I'm just not getting excited about putting new money into TLT right here...

https://i2.wp.com/northmantrader.com/wp ... .png?ssl=1

For years and years, after TLT has hit the top of that trend, 6, 12, or 18 months later, investors were regretting buying at the peak.
I would still put money into TLT in the PP for a long term hold at this point. Even if odds of large return in the short timeframe you listed is not particularly high, the odds of large return on the longer term is still intact. I think the problem right now is that these markets are currently impossible to read on the short timeframe you listed. It's really a coin flip for each asset as to whether or not it will go up, tread sideways, or go down. Nobody has any clue what is going to happen right now. So personally, in my GB if on a DCA day bonds were my lowest asset, I would still put fresh cash into them even at the top of the channel. Now, that obviously hasn't happened in some time as bonds have rallied like crazy so most of my fresh money has been going into cash and stocks (ugh those small caps in particular, if anything the small caps are the asset that I'm loathe to be holding at the moment as technically they just have not a single sign of life going on; I'm very tempted to start moving some of these over to REIT's but selling an asset low to buy an asset high is something I find hard to pull the trigger on).
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Re: The Bond Dream Room

Post by ochotona » Wed Aug 28, 2019 12:12 pm

pmward wrote:
Wed Aug 28, 2019 11:37 am
So personally, in my GB if on a DCA day bonds were my lowest asset, I would still put fresh cash into them even at the top of the channel. Now, that obviously hasn't happened in some time as bonds have rallied like crazy so most of my fresh money has been going into cash and stocks (ugh those small caps in particular, if anything the small caps are the asset that I'm loathe to be holding at the moment as technically they just have not a single sign of life going on; I'm very tempted to start moving some of these over to REIT's but selling an asset low to buy an asset high is something I find hard to pull the trigger on).

The weird thing is, and it's 100% in my head, once I have owned an asset "for a few months", I don't care what it does, but if it goes against me right after I buy it, I take it hard. In other words, there is a lag time until the Endowment Effect takes hold in my brain. Have you noticed the same?
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Re: The Bond Dream Room

Post by pmward » Wed Aug 28, 2019 12:23 pm

ochotona wrote:
Wed Aug 28, 2019 12:12 pm
pmward wrote:
Wed Aug 28, 2019 11:37 am
So personally, in my GB if on a DCA day bonds were my lowest asset, I would still put fresh cash into them even at the top of the channel. Now, that obviously hasn't happened in some time as bonds have rallied like crazy so most of my fresh money has been going into cash and stocks (ugh those small caps in particular, if anything the small caps are the asset that I'm loathe to be holding at the moment as technically they just have not a single sign of life going on; I'm very tempted to start moving some of these over to REIT's but selling an asset low to buy an asset high is something I find hard to pull the trigger on).

The weird thing is, and it's 100% in my head, once I have owned an asset "for a few months", I don't care what it does, but if it goes against me right after I buy it, I take it hard. In other words, there is a lag time until the Endowment Effect takes hold in my brain. Have you noticed the same?
When I was trading I used to big time. I was a swing trader, so my goal was usually one week to couple month hold. What used to kill me is when I would buy something and it would close the first day down from my purchase price. Since I've moved away from trading into the GB I do not find this particularly bothersome. I think it also helps that I'm DCA'ing every 2 weeks, so I've got money going in so often to so many assets that I just pay less attention. Small caps though have been frustrating me lately. Seeing them obviously in a downtrend with no hope of life anytime in the near future has really tested my patience. Matter of fact, F it, I'm just going to do it. I'm going to move half my small cap VP over to REIT's. I did some research and the DFA REIT available in my 401k has a 4.3% yield and has been holding up nicely during the recent volatility. In my IRA I can buy any REIT ETF I want. So I think I'm going to pull the trigger. I just have no real hope for small caps in the next couple years at least. So reducing that to 10% and adding 10% REIT's seems like a decent tactical move for the next little while, at least until this unpredictable volatility gets sorted out and small caps start a new uptrend.
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Re: The Bond Dream Room

Post by pmward » Wed Aug 28, 2019 12:28 pm

And it is done. Current target allocation 20% TSM, 20% long bonds, 20% cash (or equivalent), 10% Small cap blend (S&P 600 preference where possible), 10% REIT. I feel much better now. So you all can officially sell REIT's to buy small caps now, since this is of course likely going to blow up in my face, hahaha.
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