Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Bond Funds
Old 10-26-2011, 02:20 PM   #1
Dryer sheet wannabe
 
Join Date: Dec 2010
Location: Winter Haven
Posts: 24
Bond Funds

Hi, I am looking for an income investment (stream) with at least a modest amount of growth. I have approx. $150K to invest. I do not want to reinvest the dividends, but use the cash to supplement my income.
I have some mutual funds in a retirement account that I am currently contributing to w/a value of about $65K and a private reit (retirement account) w/a value of about $53K along w/some other individual stocks with a value of about $25K as well as emergency cash.
I will not be retiring for about 12 more years and my only debt is my home.
I am the main bread winner in the home and the income stream will help will bills and afford us the opportunity to breathe a little easier.
I've looked at these 3 funds. I'd like to realize at least a 5% return. I know a lot of you like Vanguard funds, but the return isn't what I'd like to receive. Any thoughts on the below? Thanks so much.
TGLMX, TGBAX, THOPX
__________________

__________________
DebER 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 10-26-2011, 03:50 PM   #2
Recycles dryer sheets
prototype's Avatar
 
Join Date: Mar 2011
Posts: 173
I;m still early in early retirement and have of alot of investment knowledge to gain. anyway I put $25K in USATX (USAA) back in June or so with monthly dividend coming back to me (about $80/month or ~4%) the fund value has stayed fairly stable. It's primarily municipal bonds so theres some tax breaks which I really won't have a handle on until I do my 2011 taxes.

Anyway I'd love to hear from people with significant bond knowledge/experience also.
__________________

__________________
prototype is offline   Reply With Quote
Old 10-26-2011, 04:03 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
How much risk are you willing to take? The 10 year treasiury is only generating a yield a shade over 2% so if you want 5% you are going to have to accept some risk.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-26-2011, 04:07 PM   #4
Dryer sheet wannabe
 
Join Date: Dec 2010
Location: Winter Haven
Posts: 24
I know I will need to take some risk, but I can't stomach a lot. It would need to be moderate.
__________________
DebER is offline   Reply With Quote
Old 10-26-2011, 04:10 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Describe "moderate." 10% loss? 20% loss? 2% loss?
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-26-2011, 08:50 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,428
Yeah, me too. I want 5% or better with little or no risk. Let me know when y'all have it figured out. I'd prefer 8%, btw.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 10-27-2011, 05:37 AM   #7
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 harley View Post
Yeah, me too. I want 5% or better with little or no risk. Let me know when y'all have it figured out. I'd prefer 8%, btw.
Penfed 5% 10 year CDs were available this year. Good deals are available you just have to keep your eyes and ears open.

Alternatively get a time machine, although I think buying options on Apple stock back in Fall of 2008, would make more sense then CDs.
__________________
clifp is offline   Reply With Quote
Old 10-27-2011, 08:22 AM   #8
Dryer sheet wannabe
 
Join Date: Dec 2010
Location: Winter Haven
Posts: 24
@Brewer12345, 5-10% as I believe the dividends will offset the drop in NAV to help keep even.
__________________
DebER is offline   Reply With Quote
Old 10-27-2011, 08:58 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by DebER View Post
@Brewer12345, 5-10% as I believe the dividends will offset the drop in NAV to help keep even.
Unless you are buying junk, that yield will be tough to achieve now. Junk can drop a lot more than 10 percent.

A way to suss out a possible investment might be to look at funds with a long track record. Look at their worst performance in any year of the last ten and compare that to the current yield. I would also have more than one fund.

I run a constrained risk portfolio for my FIL. I have a mix of convertibles,junk, high grade credit and merger arbitrage funds with a smidge of commodities in both open and closed end funds. No idea if it meets your stated downside limit, but it isn't hard to roll up a port like this.

There is also the Wellesley fund.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-27-2011, 09:05 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,866
DebER, don't expect bond funds to have any serious growth potential. I have been in various bond funds for 21 years and have found they tend to have a ceiling on their NAVs.

As to specific bond funds, I have been in a particular one for about 3 years to generate the monthly dividends needed to pay my expenses. I bought into it in late 2008 when its NAV was greatly depressed so I was able to buy about 25% more shares than I anticipated beforehand. The NAV has risen since then which is good but because I am more interested in the income stream it continues to be the number of shares I own along with the monthly dividends per share which matter the most.

The bond fund has some risk in it because the bonds in it are at the low end of the investment grade category (BBB) or just below investment grade (BB, mostly, nothing below B). Whether you want to call it a "junk bond" fund is up to you. Regardless of how you characterize it, can you tolerate the risk?

The fund pays about 4.5 cents in dividends per share per month and has a NAV of about $9. That comes out to about 6% per year in dividends, or $750 per month on an investment of $150k.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is online now   Reply With Quote
Old 10-27-2011, 09:14 AM   #11
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,100
psst - Wellesley
Attached Images
File Type: jpg Capture.JPG (26.5 KB, 43 views)
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 10-27-2011, 09:30 AM   #12
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,455
Quote:
Originally Posted by Alan View Post
psst - Wellesley
+1
__________________
MichaelB is offline   Reply With Quote
Old 10-27-2011, 09:33 AM   #13
Dryer sheet wannabe
 
Join Date: Dec 2010
Location: Winter Haven
Posts: 24
I've looked at these TGLMX, TGBAX, THOPX as from what I read, it's best to stay in Short and Intermediate funds right now as interest rates are bound to rise soon.
Any Opinion on the above?
Thanks so much for your comments/suggestions. I has been a help to me.
__________________
DebER is offline   Reply With Quote
Old 10-27-2011, 10:26 AM   #14
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,043
Quote:
Originally Posted by DebER View Post
I've looked at these TGLMX, TGBAX, THOPX as from what I read, it's best to stay in Short and Intermediate funds right now as interest rates are bound to rise soon.
Any Opinion on the above?
Thanks so much for your comments/suggestions. I has been a help to me.
TGLMX: junk bonds, risky. You shouldn't put all your money in something like this, but a small helping could help boost your portfolio yield.

TGBAX: global bond fund. Is it hedged for currency?

THOPX: short investment grade fund. I think you have the right idea here, but this is an expensive fund and its credit quality is at the lower end of the investment grade spectrum. You could probably find a better alternative.
__________________
FIREd is online now   Reply With Quote
Old 10-27-2011, 10:32 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by FD View Post
TGLMX: junk bonds, risky. You shouldn't put all your money in something like this, but a small helping could help boost your portfolio yield.

TGBAX: global bond fund. Is it hedged for currency?

THOPX: short investment grade fund. I think you have the right idea here, but this is an expensive fund and its credit quality is at the lower end of the investment grade spectrum. You could probably find a better alternative.
Agree with your comments. I also think it is worth noting that we are in a really low interest rate environment and if the economy starts looking stronger and rates rise you could be in for a lot of pain.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-27-2011, 10:50 AM   #16
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by MichaelB View Post
+1
me too +1. Wellesley is my go to for income and a little bit of growth.
__________________
nun is offline   Reply With Quote
Old 10-27-2011, 04:05 PM   #17
Dryer sheet wannabe
 
Join Date: Dec 2010
Location: Winter Haven
Posts: 24
Quote:
Originally Posted by brewer12345 View Post
Agree with your comments. I also think it is worth noting that we are in a really low interest rate environment and if the economy starts looking stronger and rates rise you could be in for a lot of pain.
It almost seems that no matter what I do, I'm going to lose unless I'm in fixed income instruments, such as CD's. Unfortunately, that's no way to make any money. Bummer
__________________
DebER is offline   Reply With Quote
Old 10-27-2011, 04:10 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by DebER View Post
It almost seems that no matter what I do, I'm going to lose unless I'm in fixed income instruments, such as CD's. Unfortunately, that's no way to make any money. Bummer
The answer for me is to live with some volatility and diversify. YMMV.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-27-2011, 04:10 PM   #19
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,107
Quote:
Originally Posted by DebER View Post
It almost seems that no matter what I do, I'm going to lose unless I'm in fixed income instruments, such as CD's. Unfortunately, that's no way to make any money. Bummer
No risk, no reward is a condition most of us mere mortals must learn to deal with.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 10-27-2011, 04:31 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,437
Quote:
Originally Posted by clifp View Post
Penfed 5% 10 year CDs were available this year. Good deals are available you just have to keep your eyes and ears open.
I wish they would run another special soon. I have some 6% cd's maturing with PF around the first of the year.
__________________

__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 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
Floating Rate Bond Funds nico08 FIRE and Money 8 09-03-2011 11:51 AM
Vanguard actively managing index funds. clifp FIRE and Money 11 08-26-2011 03:13 PM
Bond Funds for income? HappyEarlyRetirementForum FIRE and Money 24 08-24-2011 09:18 AM
Money Market funds in potential danger. clifp FIRE and Money 22 07-06-2011 07:10 AM

 

 
All times are GMT -6. The time now is 07:15 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.