Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
I like my bonds these days
Old 08-01-2006, 11:45 AM   #1
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
I like my bonds these days

I'm one of the naive investors around here, just trying to stay out of big trouble.

I have about 40% in bonds, big diverse funds mostly. One thing I noticed is that not only are they doing nicely as ballast with the stock sag (I fully expected them to do that), but they are actually creeping up nicely in share price.

Is this normal? Can I expect them to actually improve when stocks are down, or just to hold their own and buffer the losses?
__________________

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay 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!

Re: I like my bonds these days
Old 08-01-2006, 11:47 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: I like my bonds these days

Depends on interest rates. When the bubble burst, long duration, high grade bonds spit out double digit returns for 2 or 3 years.
__________________

__________________
"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
Re: I like my bonds these days
Old 08-01-2006, 12:40 PM   #3
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 718
Re: I like my bonds these days

I really dont want to be this heavy in bonds. However not much you can do. Might as well make some money than no money.
__________________
Mwsinron is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 12:50 PM   #4
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: I like my bonds these days

Quote:
Originally Posted by Mwsinron
I really dont want to be this heavy in bonds. However not much you can do. Might as well make some money than no money.
The funny thing is that FIRECalc failure rates seems to optimize at 55-60% stocks in my scenarios. Going way up on stocks doesn't help that much and will presumably increase volatility.

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 01:31 PM   #5
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 718
Re: I like my bonds these days

Currently I believe we are around 45 fixed and 55 stocks. Stocks are mostly skewed towards overseas Europe and Asia. A small amount in emerging markets. Im not really sure what I want to do with new money coming in. I guess cash till I figure something out.
__________________
Mwsinron is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 03:00 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: I like my bonds these days

stocks are sagging? I'm up about 30k over the last couple of months...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 03:33 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,709
Send a message via Skype™ to kcowan
Re: I like my bonds these days

I am up 32% YTD in the stock portion. Was highest in April then regressed in late May and especially June then rebounded in July. Bonds and funds portion did much less.
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 05:04 PM   #8
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Re: I like my bonds these days

Quote:
Originally Posted by kcowan
I am up 32% YTD in the stock portion.
Is this a diversified basket of stocks? It's very hard to get that kind of return unless it is a focus set of stocks.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 05:30 PM   #9
Full time employment: Posting here.
 
Join Date: Feb 2004
Location: Okanagan Valley
Posts: 805
Re: I like my bonds these days

Quote:
Originally Posted by Spanky
Is this a diversified basket of stocks? It's very hard to get that kind of return unless it is a focus set of stocks.
5-6% would be more typical YTD for well diversified portfolio of equities.

Currently 40% cash looking for some buying opportunities in Sept and Oct.
__________________
AltaRed is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 05:52 PM   #10
Thinks s/he gets paid by the post
Leonidas's Avatar
 
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
Re: I like my bonds these days

32%! 8)

What kind of beer do you like? I'll bring a case and my notepad and we'll sit down and you can show me how you pick stocks!

I'm up 6.34% YTD and pretty darn pleased with that.

__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
Leonidas is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 05:59 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
Re: I like my bonds these days

im up 5% overall
__________________
mathjak107 is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 06:42 PM   #12
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: I like my bonds these days

Quote:
Originally Posted by Leonidas
32%! 8)
What kind of beer do you like? I'll bring a case and my notepad and we'll sit down and you can show me how you pick stocks!
I'm up 6.34% YTD and pretty darn pleased with that.
I won pretty big at roulette last time I was in Vegas. I'm pretty sure it's cause I know a lot of stuff you don't know. For a case of Boddington Ale (pint can with the agitator built in), I'll tell you how I do it.

Don't count on hearing from my when I lose, by the way. NOYB.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 07:06 PM   #13
Thinks s/he gets paid by the post
Leonidas's Avatar
 
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
Re: I like my bonds these days

Quote:
Originally Posted by Rich_in_Tampa
I won pretty big at roulette last time I was in Vegas. I'm pretty sure it's cause I know a lot of stuff you don't know. For a case of Boddington Ale (pint can with the agitator built in), I'll tell you how I do it.

Don't count on hearing from my when I lose, by the way. NOYB.
To heck with the roulette strategy - tell me about how you win on the Big Wheel!
__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
Leonidas is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 07:57 PM   #14
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: I like my bonds these days

Quote:
Originally Posted by Leonidas
To heck with the roulette strategy - tell me about how you win on the Big Wheel!
Nah, I lose all the time -- worst odds in the casino, I've heard. But I've gotten good at spreading my bets and I can make $100 last a long time. Folks come and go, sit next to you, chat each other up for a while, sip a free cocktail or two. Pretty fun in small doses.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 08:03 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
Re: I like my bonds these days

My bond holdings are making me happy too. *I don't know why but:

- Maybe I got tired of waiting for rates to rise (probably) - I think I'd been waiting since 2003.
- Maybe somehow 5% on the 10-yr was "good enough". *At least historically it had returned to 5% fairly often whereas 3% was clearly out of historical range.
- Maybe my bond allocation had just shrunk way too low.

Whatever

But in mid April of this year, I took the plunge, and brought my bond allocation back up to where it was supposed to be.

And I've been glad I did ever since!!! *

I really don't mind being a wee bit early. *I could have waited a month or so. *But it was close enough for me.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 08:12 PM   #16
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: I like my bonds these days

Quote:
Originally Posted by audreyh1
My bond holdings are making me happy too.
But in mid April of this year, I took the plunge, and brought my bond allocation back up to where it was supposed to be.
Sweet timing - nice going.

Next time you get an urge to re-allocate, drop me a PM, OK?
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: I like my bonds these days
Old 08-01-2006, 09:30 PM   #17
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Re: I like my bonds these days

Quote:
Nah, I lose all the time -- worst odds in the casino
I cannot recall winning anything from the casino, lottery, drawing, etc. It's a story of my life.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: I like my bonds these days
Old 08-02-2006, 05:20 AM   #18
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
Re: I like my bonds these days

"I like my bonds these days..."

HUh? My wacky portfolio is up 9.7% ytd.. the reason it is so LOW is the fact that I bought into TIPS (+.3%), TLT (-6.9%), and GIM (-8.2%) -- my attempt to add some bonds to my virtually all-stock allocation. I didn't get any short-term govt bonds yet because I didn't see a huge difference between the brokerage's MMF (4.7%) and Vanguard's VFISX yield, for example (4.9%).. SHY says 4.4%. Bought into ETFs cause I am just too lazy to build a ladder.* * FAX, tho', is up 14.7%.

I know in the long term this is supposed to add some ballast, but I'm not feeling the stabilizing effect currently. Am I looking at the numbers wrong? If I run my IRR report excluding TIPS, TLT, GIM, and, to be fair, FAX. I get 18%.

It was very painful to see total value go from (roughly) $995,000 in Jan. to $1,085,000, back to about $990,000 [ aaahhh! I lost $95,000!!!!].* $1,035,000 right now after taking out a bit to live on, so I'm comfy. I know with a heavy stock allocation I should expect big swings; it's just harder to process when it happens right as I am starting out.. with retirement, with asset allocation... and when I am hovering right around "the number." I didn't feel this way when $400,000 turned into $350,000 for some reason.
__________________
ladelfina is offline   Reply With Quote
Re: I like my bonds these days
Old 08-02-2006, 08:53 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
Re: I like my bonds these days

Quote:
Originally Posted by Rich_in_Tampa
Sweet timing - nice going.

Next time you get an urge to re-allocate, drop me a PM, OK?*
LOL! I'm not supposed to be timing, and I usually don't. But with interest rates so low for so long, I couldn't bring myself to rebalance to my normal bond allocation until treasuries finally got back to a "reasonable" rate.

And even now a lot of people think I'm way too early and won't touch bonds because they think rates will go at least to 6%. But that kind of game is endless. At some point you gotta say "enough already" and go on with your life.

Ladelfina - Q1 of this year saw the most painful hit on bonds. That's when the interest rate rises really causes the biggest capital loss. That's why my bond allocation had withered so severely and I finally had to act.

Big swings in the portfolio - you gotta kind of ignore them most of the time. If you are heavily allocated to stocks, bonds won't appear to show much ballast. Large swings can be useful triggers for reviewing your portfolio to see if you need to rebalance. Other than that - volatility just causes unnecessary mental anguish. If it causes too much anguish - that indicates you might need to lower your stock allocation.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: I like my bonds these days
Old 08-02-2006, 09:01 AM   #20
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: I like my bonds these days

Quote:
Originally Posted by audreyh1
At some point you gotta say "enough already" and go on with your life.
Audrey, you sound at peace. How many years' expenses do you have in cash, if I may ask?
__________________

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay 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
Short Term vs. Intermd Term Bonds TromboneAl FIRE and Money 35 07-21-2006 08:58 AM
TIPS vs I Bonds ron FIRE and Money 39 01-30-2005 04:56 PM
Some questions on bonds woolybully FIRE and Money 13 11-11-2004 05:04 PM
About those five-year CD ladders-- I bonds? Nords FIRE and Money 6 07-05-2004 02:37 PM
The Scoop on High Yield Bonds Ted FIRE and Money 9 12-04-2003 01:03 PM

 

 
All times are GMT -6. The time now is 10:30 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.