Gyroscopic Investing

ochotona wrote: ↑Sat Jun 30, 2018 4:58 am I follow Kathy Jones' advice. She is the bond strategist at Schwab. She advised a long time ago to go to 3-5 year durations. Now she's thinking about adding more duration. Follow her @kathyjones on Twitter.

HappyMan wrote: ↑Sat Jun 30, 2018 7:12 am Great! Thanks for the reference. When I talked to Schwab about treasuries and ask for an advice, they basically told me to come back when I have at least a half of a mil. How often does she tweet an actual advice?
Do you hold to expire or sell/buy every once in a while?

ochotona wrote: ↑Sat Jun 30, 2018 9:08 pm
Here's the actual page where bond advice is posted: https://www.schwab.com/resource-center/ ... d-insights

I used to own only ETFs, but now I'm buying individual bonds and holding them to maturity. Short-term Treasuries and high quality corporates. It has been a good experience.

jhogue wrote: ↑Sat Jun 30, 2018 1:23 pm Talk to someone else at Schwab.

I buy both LTTs and STTs through my Fidelity brokerage account. Fidelity's minimum bond purchase is $1,000. The Bond Desk will talk to you over the phone if you have questions. I think Vanguard has roughly the same deal. Even though Treasury bonds are liquid and can be sold at any time, I aim to hold them until maturity.

I also recommend that you read Gumby's tutorial on the Bond board before buying bonds online at Fidelity.

jhogue wrote: ↑Sun Jul 01, 2018 7:40 pm See "Treasury Bond Buying Tutorial," the first thread under "Bonds"

or:

viewtopic.php?f=3&t=1670

jhogue wrote: ↑Sun Jul 01, 2018 7:40 pm See "Treasury Bond Buying Tutorial," the first thread under "Bonds"

or:

viewtopic.php?f=3&t=1670

ochotona wrote: ↑Tue Jul 03, 2018 5:57 pm Marilyn Cohen, "The Little Bond e-Book"

jhogue wrote: ↑Wed Jul 04, 2018 1:04 pm Let the buyer beware! Marilyn Cohen is promoting the sale of municipal and corporate bonds in this book. These are not suitable for the HBPP.

1. Anyone tempted to buy munis because they are free of federal, state, and local taxes should read up on Puerto Rico and Chicago or ask pug chief for a tutorial on fiscal finance in the Land of Lincoln.

2. As for corporate bonds, about 20 years ago, I took Marilyn Cohen's advice (she writes a bond column for Forbes) and bought some really neat GMAC zero coupon bonds with a coupon of 7.65%. They tanked during the 2008-2009 recession, and while I eventually got out at a profit, it was a wild ride while GMAC was being bailed out by TARP and then converted into Ally Bank. Trust me, you don't want to go for that ride. Bonds should be boring, not exciting.

jhogue wrote: ↑Wed Jul 04, 2018 2:19 pm Yeah, I know.

My caveat emptor about munis and corporate bonds applies to holders of VPs as well as more orthodox holders of the HBPP.

Are you recommending investors buy munis and corporate bonds?

ochotona wrote: ↑Sat Jul 28, 2018 7:24 pm FYI, this is where I am now:

10% cash (90 day T-Bills, Ally Bank)
10% gold
10% TIPS (I put I-Bonds in the TIPS bucket)
25% core bonds with 4 year duration (Treasuries, Total Bond Market, Short Term High Quality Corporates - no junk, no EM, no preferreds)
45% GEM

This is sleep well at night portfolio for sure.

HappyMan wrote: ↑Sat Jul 28, 2018 10:34 pm Nice allocation! Keep thinking why did you chose 3-4 year bonds over, for example, 1 year or 10 year ones?

ochotona wrote: ↑Sun Jul 29, 2018 5:45 am
My criterion was: how much can I tolerate losing, emotionally, if interest rates were to rise? That's why I chose that duration. It's my pain threshold. Through the long bond fluctuations I have not had much discomfort, and on a point-forward basis, 4 year bonds are in the meaty, juicy part of the yield curve.

When GEM goes out of stocks, I may lengthen, however, anticipating more QE.