The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

Moderator: Global Moderator

pmward
Executive Member
Executive Member
Posts: 1731
Joined: Thu Jan 24, 2019 4:39 pm

Re: The Bond Dream Room

Post by pmward » Wed May 15, 2019 9:13 am

We are like .5% away in TLT from setting a higher high. Combined with the higher low we set in the pullback over the last couple of months, that would officially be a confirmed new up trend. Who would have thought a year ago when they were raising rates like crazy that we would be potentially entering a new official uptrend in long treasuries now?
Pet Hog
Executive Member
Executive Member
Posts: 218
Joined: Tue May 28, 2013 4:08 pm

Re: The Bond Dream Room

Post by Pet Hog » Wed May 15, 2019 3:39 pm

pmward wrote:
Wed May 15, 2019 9:13 am
Who would have thought a year ago when they were raising rates like crazy that we would be potentially entering a new official uptrend in long treasuries now?
I think there are many members of this forum who didn't (and still don't) believe "there's nowhere for rates to go but up!"TM I'm happy that I got to add to my STTs at about 2.5%, but my expectation is that they will return to near-zero soon. But I'm happy to be a PP investor and not make predictions.
User avatar
dualstow
Executive Member
Executive Member
Posts: 11209
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: The Bond Dream Room

Post by dualstow » Thu May 16, 2019 9:36 am

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.
pariah — 1610s member of a low caste in S. India; Tamil (Dravidian) “drummer”, as members of the lowest caste played drums at festivals. “social outcast,” 1819.
User avatar
dualstow
Executive Member
Executive Member
Posts: 11209
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: The Bond Dream Room

Post by dualstow » Thu Aug 01, 2019 10:53 am

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.
pariah — 1610s member of a low caste in S. India; Tamil (Dravidian) “drummer”, as members of the lowest caste played drums at festivals. “social outcast,” 1819.
pmward
Executive Member
Executive Member
Posts: 1731
Joined: Thu Jan 24, 2019 4:39 pm

Re: The Bond Dream Room

Post by pmward » Thu Aug 01, 2019 12:42 pm

Yeah, TLT hit the highest level to day since Oct 2016. Only 6% away from all time highs.
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: The Bond Dream Room

Post by Ad Orientem » Fri Aug 02, 2019 11:17 pm

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
Executive Member
Executive Member
Posts: 1731
Joined: Thu Jan 24, 2019 4:39 pm

Re: The Bond Dream Room

Post by pmward » Sat Aug 03, 2019 8:41 am

Ad Orientem wrote:
Fri Aug 02, 2019 11:17 pm
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.
User avatar
dualstow
Executive Member
Executive Member
Posts: 11209
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: The Bond Dream Room

Post by dualstow » Sat Aug 03, 2019 2:51 pm

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.
pmward wrote:
Sat Aug 03, 2019 8:41 am
Ad Orientem wrote:
Fri Aug 02, 2019 11:17 pm
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.
pariah — 1610s member of a low caste in S. India; Tamil (Dravidian) “drummer”, as members of the lowest caste played drums at festivals. “social outcast,” 1819.
pmward
Executive Member
Executive Member
Posts: 1731
Joined: Thu Jan 24, 2019 4:39 pm

Re: The Bond Dream Room

Post by pmward » Sun Aug 04, 2019 7:26 am

dualstow wrote:
Sat Aug 03, 2019 2:51 pm
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.
User avatar
Xan
Administrator
Administrator
Posts: 3189
Joined: Tue Mar 13, 2012 1:51 pm

Re: The Bond Dream Room

Post by Xan » Sun Aug 04, 2019 3:07 pm

Is there really a difference between buying fresh and holding? (I'm assuming transaction fees are negligible.)
User avatar
dualstow
Executive Member
Executive Member
Posts: 11209
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: The Bond Dream Room

Post by dualstow » Sun Aug 04, 2019 7:38 pm

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.
pmward wrote:
Sun Aug 04, 2019 7:26 am
dualstow wrote:
Sat Aug 03, 2019 2:51 pm
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.
pariah — 1610s member of a low caste in S. India; Tamil (Dravidian) “drummer”, as members of the lowest caste played drums at festivals. “social outcast,” 1819.
User avatar
dualstow
Executive Member
Executive Member
Posts: 11209
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: The Bond Dream Room

Post by dualstow » Sun Aug 04, 2019 7:44 pm

Xan wrote:
Sun Aug 04, 2019 3:07 pm
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.
pariah — 1610s member of a low caste in S. India; Tamil (Dravidian) “drummer”, as members of the lowest caste played drums at festivals. “social outcast,” 1819.
Post Reply