Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Ultra short-term bond funds
Old 05-07-2007, 10:46 AM   #21
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: Ultra short-term bond funds

Quote:
Originally Posted by PPT
Only thing the Fed can do is talk tough and hope the subprime situation does not spread. Dr. Bernanke will just continue to flood M3 - Gold and inflating U.S. stock prices is a product of this.
Maybe, or maybe not.

I think an equally likely scenario is that the Fed chops short term rates, the USD continues slumping and longer rates eventually rise. The yield curve de-inverts, and the pain lasts until the UK and Europe stop raising rates.
__________________

__________________
"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
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: Ultra short-term bond funds
Old 05-07-2007, 10:58 AM   #22
Dryer sheet aficionado
 
Join Date: Apr 2007
Posts: 43
Re: Ultra short-term bond funds

Quote:
Originally Posted by brewer12345
Maybe, or maybe not.

I think an equally likely scenario is that the Fed chops short term rates, the USD continues slumping and longer rates eventually rise. The yield curve de-inverts, and the pain lasts until the UK and Europe stop raising rates.
Then yields will go up because who wants to buy U.S. debt when they know the Fed will sacrifice the U.S. dollar? We need to be able to borrow $2.5B from overseas to keep this economy humming along.

Whatever way you cut it - Greenspan is probably very happy he is gone.
__________________

__________________
PPT is offline   Reply With Quote
Re: Ultra short-term bond funds
Old 05-07-2007, 11:00 AM   #23
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: Ultra short-term bond funds

Quote:
Originally Posted by PPT
Then yields will go up because who wants to buy U.S. debt when they know the Fed will sacrifice the U.S. dollar? We need to be able to borrow $2.5B from overseas to keep this economy humming along.
Uhuh, but it will only matter as long as the US is slowing as other economies are expansionary.
__________________
"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: Ultra short-term bond funds
Old 05-07-2007, 11:12 AM   #24
Dryer sheet aficionado
 
Join Date: Apr 2007
Posts: 43
Re: Ultra short-term bond funds

Quote:
Originally Posted by brewer12345
Uhuh, but it will only matter as long as the US is slowing as other economies are expansionary.
We will get a sniff tomorrow at 1pm when the Treasury holds the 10 year auction. I wish the 10 year auction was on Thursday (FOMC announcement on Wednesday) but they probably planned it that way.

I will be watching the indirect bids.

Nice talking to you. My plane is boarding for lovely Boston. . Go Red Socks.
__________________
PPT is offline   Reply With Quote
Re: Ultra short-term bond funds
Old 05-07-2007, 11:16 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,913
Re: Ultra short-term bond funds

Quote:
Originally Posted by PPT
Nice talking to you. My plane is boarding for lovely Boston.
The long wait times in airports are almost bearable with free WiFi.
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Re: Ultra short-term bond funds
Old 05-08-2007, 07:48 PM   #26
Dryer sheet wannabe
 
Join Date: Mar 2006
Posts: 16
Re: Ultra short-term bond funds

Thanks for the discussion. A couple of days ago I put $50k in the SWYSX ultra short-term bond fund. This is not money I need for years. I have plenty in stock + index funds, CDs, and MMF. I just thought maybe I should put some in a bond fund. The last time I did (see my original post) I sort of got burnt so for the last 13 years I have stayed away from them.

Now that I have you on the line though I have another related question. What do you think of longer term bond funds right now? All my money is in the stock market and CDs/MMF except for this $50k in the ultra short-term bond fund. What do you think about putting some money in longer term bond funds?
__________________
safari is offline   Reply With Quote
Re: Ultra short-term bond funds
Old 05-08-2007, 09:16 PM   #27
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Re: Ultra short-term bond funds

Compared to short-term and intermediate bonds, long term bonds have a higher correlation to stocks, slightly higher yield than intermediate but lower than short-term. The return of long-term bonds is only slightly better than those of short-intermediate bonds but a significantly higher risk. In short, I would not put my money into long-term bond funds.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: Ultra short-term bond funds
Old 05-09-2007, 03:05 AM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
Re: Ultra short-term bond funds

i agree long term bonds seem to correlate to stocks alot more than we would thing. actually long term they are riskier than stocks. long term bonds have had alot more negative years where they failed to beat inflation and few of the substantial gains in the good years .

__________________
mathjak107 is offline   Reply With Quote
swysx was run by crooks
Old 11-19-2007, 08:26 PM   #29
Confused about dryer sheets
 
Join Date: Nov 2007
Posts: 2
swysx was run by crooks

Quote:
Originally Posted by mickeyd View Post
Can someone advise me what makes a bond fund ultra short? Sounds like a MMF/STB hybrid to me?
That turns out to have been a far better question than almost anyone knew.

The answer was, "whatever Schwab says it means". At one time it included 30 year bonds.

The "maturity" report also turns out to mean whatever Schwab says it meant. A sub prime mortgage which will have its interest rate changed in three months was a maturity of three months.
A piece of commercial paper which is callable in three months if interest rates drop, but can be left out for twenty years if interest rates rise has a maturity of three months.

SWYSX is down from $9.68 in July to $9.28 as of today. Down 5 cents in the last two days.

The crooks got caught. They sold this thing as a safe place for cash, while investing it in a way which might have been justified if they had yielded 8%. Scared of lawsuits, they now describe as risky. They don't describe it as a place for cash. They quote a maturity of about two years, which is probably more accurate, but still subject to their wonderland definitions.

dw
__________________
dwshelf is offline   Reply With Quote
Old 11-19-2007, 08:44 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,526
Fidelity Short Term Bond (FSHBX) has been hammered lately, too. What I thought was a short term, high quality corporate bond fund didn't do so well over the last 6 months in the credit crisis. The yield isn't any better than vanguard's equivalent fund, they just apparently took a lot more risk at this fund to maintain a similar yield as vanguard's equivalent fund while charging an expense ratio 1.5x that of the comparable VG fund. In other words, FSHBX shareholders are paying more for less.
__________________
FUEGO is offline   Reply With Quote
Old 11-20-2007, 03:01 AM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
Quote:
Originally Posted by mathjak107 View Post
it all depends which way you think rates are headed. no one can answere that question for you. my opinion is we most likely are headed for a slowdown and i think more likely to see lower rates than higher rates so i have more in short term bond funds than cd's and money markets. but if im wrong the money markets will do a little better.

a short term bond fund usually wont loose much in rising rates and if you re-invest the dividends it recovers very quickly

also although your nav dropped the interest rate you were getting rose so overall i bet you werent down as much as you thought.


boy was i wrong on this. fidelity's ultra short term bond fund tumbled badely. they lost about 8% from the top to the bottom. they had quite a bit sub prime. fidelity short term bond fund did poorly too but not as bad
__________________
mathjak107 is offline   Reply With Quote
Old 11-20-2007, 06:49 AM   #32
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: 16,446
Short term bonds funds can really burn you if you don't watch it. A couple years ago, people were expecting short term to out perform long/intermediate with rising interest rates, but guess what! Short funds got hurt by the rising interest rates, but long rates barely rose and intermediate/long bond funds outperformed short. You just never know how things are going to turn out!

But the credit risk thing - that's a tough one to call. Compare the Fidelity bond fund performance to Metropolitan West (or Vanguard). The difference is that the latter fund houses deliberately steered clear of subprime. Fidelity, like a lot of fund families, really got caught. The most shocking one was Fidelity Ultra-short Bond Fund - one I track since I considered it a year or so ago. Ouch!

Audrey
__________________
audreyh1 is online now   Reply With Quote
Old 11-20-2007, 08:44 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by mickeyd View Post
Can someone advise me what makes a bond fund ultra short? Sounds like a MMF/STB hybrid to me?
They buy instruments due within a yuear typically, including but not limited to secondary market corporates, Treasuries, etc........
__________________

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude 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
Are there any 'date certain' (Target) bond funds? ERD50 FIRE and Money 1 02-26-2007 11:50 AM
Time to buy bond funds or keep waiting? soupcxan FIRE and Money 28 04-04-2006 08:31 PM
Corus Bank Short Term CDs on the move again MJ FIRE and Money 8 07-21-2005 05:41 PM
Short Term Corp Fund, I-Bonds, or CDs? Bob_Smith FIRE and Money 17 12-14-2004 07:24 AM
short term bond funds DFW_M5 FIRE and Money 4 09-30-2003 06:35 PM

 

 
All times are GMT -6. The time now is 06:35 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.