Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Bond Fund Mgrs increasing cash
Old 07-22-2011, 11:56 AM   #1
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,980
Bond Fund Mgrs increasing cash

See link about several major bond fund managers increasing their cash positions, although their definition of cash may be something different from the average investor. Interesting nonetheless:

Gundlach Leads Bond Funds Boosting Cash to Most Since 2008 - Businessweek
__________________

__________________
DFW_M5 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-22-2011, 04:40 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
An excellent article over at Morningstar Bond fund cut the cord.

In addition to the pile of cash bond managers are sitting on many of them are investing the maximum allowed in foreign country and emerging market debt. I happen to think these are smart moves by the managers, but if they blow up there very well maybe many surprised and disappointed investor that find out you can lose money in bonds.
__________________

__________________
clifp is offline   Reply With Quote
Old 07-23-2011, 09:12 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
I believe I have an age appropriate amount of my assets invested in bonds, but I have to admit that I don't understand them at all which bothers me. I read both of those articles and have no idea if they are inferring that bonds are about to implode and I should run for the hills (if i was a market timer) or if the managers are being smart by attempting to reduce exposure by holding more cash while trying to boost returns by investing in riskier arenas, which in my opinion could be a smart move.
__________________
utrecht is offline   Reply With Quote
Old 07-23-2011, 11:33 AM   #4
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,980
Quote:
Originally Posted by utrecht View Post
or if the managers are being smart by attempting to reduce exposure by holding more cash while trying to boost returns by investing in riskier arenas, which in my opinion could be a smart move.
My take is more in line with your above conclusion, however, everything has become so complex, I certainly cannot draw any conclusions/strategy with any degree of reasonable certainty. I have gradually increased my cash position since April from both equities and FI holdings in anticipation of some buying opportunities near term based on my personal view of the macro economic environment, but I am still holding about 27% in equities and 30% in bonds. I suspect most here are buy and hold indexers, so paring back ones allocation as I have done is viewed negatively (dirty market timer).
__________________
DFW_M5 is offline   Reply With Quote
Old 07-23-2011, 05:40 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by utrecht View Post
I believe I have an age appropriate amount of my assets invested in bonds, but I have to admit that I don't understand them at all which bothers me. I read both of those articles and have no idea if they are inferring that bonds are about to implode and I should run for the hills (if i was a market timer) or if the managers are being smart by attempting to reduce exposure by holding more cash while trying to boost returns by investing in riskier arenas, which in my opinion could be a smart move.
My take is a bit of both. Bill Gross, a guy from the rating agency side of S&P, and two sharp (or at least they seem to me) woman journalist from the Economist and Financial Times were on Charlie Rose last week.

One of the takeaways I got from their interesting conversation was that a lot of conventional wisdom is being turned on its head. In particular in the old days risk that an emerging countries sovereign debt would default or (I guess the new term is being restructure ala Greece) is much higher than US or Europe. Now days the balance sheets of a China, Brazil, India look sounder than most developed countries, and their growth prospects look vastly better.

Likewise, corporate debt is traditionally viewed as riskier than government debt, but that is changing. I and more importantly professional managers are looking at the corporate and saying, who do I trust more to pay back my bond in 20 years Johnson & Johnson, Exxon or Uncle Sam, Royal Dutch Shell Oil, or Holland, Toyota or Japan, Siemens or Germany.




Anybody who claims certainty in investing in these challenging times is either a liar or a fool, or likely both.
__________________
clifp is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Bond fund in taxable account? joecaf53 FIRE and Money 1 07-09-2011 03:48 PM
Neuberger Berman High Income Bond Fund glinka FIRE and Money 2 07-02-2011 05:09 PM

 

 
All times are GMT -6. The time now is 01:57 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.