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Re: Why Bother With Stocks?
Old 03-25-2006, 07:14 PM   #21
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Re: Why Bother With Stocks?

That wasnt my point either.

Read my post again.

Then read my sig.
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Re: Why Bother With Stocks?
Old 03-25-2006, 07:43 PM   #22
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Re: Why Bother With Stocks?

Quote:
Originally Posted by Cute 'n' Fuzzy Bunny
Then read my sig.
If there is any doubt as to wording or intent in what I have written, presume the most unlikely explanation. Next, choose the most minute aspect of the post, remove it from context, proclaim it wrong, proceed to pick it to death, then agree with it, and then disagree with yourself.
Huh
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Re: Why Bother With Stocks?
Old 03-25-2006, 07:58 PM   #23
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Re: Why Bother With Stocks?

Quote:
Originally Posted by Cute 'n' Fuzzy Bunny
That wasnt my point either.

Read my post again.

Then read my sig.
You mentioned "low risk" in the same breath as VG junk. I guess that reasonable people might disagree about what "low" levels of risk are, but I think it is worth remembering that there is a reason you are getting paid 250 BP over treasuries. Don't get completely lulled to sleep by the last 18 months (remember 2002).
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Re: Why Bother With Stocks?
Old 03-25-2006, 08:02 PM   #24
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Re: Why Bother With Stocks?

I did not use the word "low" in my post. Anywhere.

To avoid making you scroll back up, I said "If you wanted a 7% yield with a little risk" about the vanguard high yield fund in the context of comparing it with a CEF yielding a similar rate. Indicating if someone wants a high yield at a risk, there are simpler ways to get it without taking on a lot more risk. Perhaps less. Note that I wouldnt recommend anything risky in exchange for a lousy 7% return compared to current CD rates. But if I had to pick one...

If you can find a 7% CEF that has a lower risk profile (providing we can agree on what 'risk' means, and what 'lower' is in context with that), please do share.
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Re: Why Bother With Stocks?
Old 03-25-2006, 08:09 PM   #25
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Re: Why Bother With Stocks?

Quote:
Originally Posted by Cute 'n' Fuzzy Bunny

If you can find a 7% CEF that has a lower risk profile (providing we can agree on what 'risk' means, and what 'lower' is in context with that), please do share.
I'm gonna decline to split hairs (hares?) with you on this one. Too much wine consumed to deal with semantics.

On CEFs with less risk than VG junk: what kind of risk do you wish to bear? VG junk is mostly credit risk, which tends to be correlated with the equity indexes (my main knock on junk in a diversified portfolio). If you prefer currency risk, GIM delivers 7% or better. If you prefer interest rate risk, there are lots of mortgage REITS and CEFs that will deliver yield if you are willing to bear interest rate/yield curve shape risk. Probably wise to have a little bit of all of it, at least over the long term.

Over the short term, well, let's just say that I find credit spreads to be vanishingly small at the moment and I am less than eager to pile into junk for exactly that reason. But that doesn't mean that spreads won't gring tighter before the inevitable capital markets crash that gaps them out.
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Re: Why Bother With Stocks?
Old 03-25-2006, 08:13 PM   #26
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Re: Why Bother With Stocks?

Quote:
Originally Posted by brewer12345
Too much wine consumed to deal with semantics.
That explains it.

Your points are entirely valid and I agree with them. I also agree with your contention against what you thought I said, which I didnt say. Which is apparently too hard for you to say! Say what?

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Re: Why Bother With Stocks?
Old 03-25-2006, 08:27 PM   #27
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Re: Why Bother With Stocks?

Quote:
Originally Posted by Cute 'n' Fuzzy Bunny
That explains it.

Your points are entirely valid and I agree with them.* I also agree with your contention against what you thought I said, which I didnt say.* Which is apparently too hard for you to say!* Say what?

Careful. Its easy to be so sharp that you cut yourself.
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Re: Why Bother With Stocks?
Old 03-25-2006, 08:53 PM   #28
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Re: Why Bother With Stocks?

I'm feeling generous, and the guinness is good, so I'm going to go back and change my post so that your contentions of it are actually accurate
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Re: Why Bother With Stocks?
Old 03-26-2006, 05:00 AM   #29
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Re: Why Bother With Stocks?

The other reason for the high yields of CEFs is the discount. GIM's discount has narrowed from 8% to 1.27%. The yield has come down from about 7% to 5.59%.

Wouldn’t the positive side of the global savings glut be that investing in leveraged funds be less risky because rates would stay low?

If rates do go against leverage, would it be slow enough to get out of the way?
What I have read is that the fed is almost done raising rates. Japan and Europe are raising rates but aren’t they going to do it in baby steps.

Actually I am interested in CEFs but haven't done much beyond GIM and CEE (Eastern Europe Fund). Still haven't made up my mind about them.

Mike
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Re: Why Bother With Stocks?
Old 03-27-2006, 07:03 AM   #30
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Re: Why Bother With Stocks?

Quote:
Originally Posted by mikew

Actually I am interested in CEFs but haven't done much beyond GIM and CEE (Eastern Europe Fund). Still haven't made up my mind about them.

Mike
I don't think you need to "decide" about CEFs as a whole. Just each one individually. Sometimes they are a great deal (a portfolio you like at a discount to NAV), sometimes they are a rip-off.

GIM is less of a great deal than it was a little while ago. If I were looking to put new money into it, I might be inclined to wait for a fatter (5%) discount.
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