All Fixed Income Portfolio

[Dennis]

I agree with him, but alot sooner than he said.. Prior to my Being able to retire? I moved over 75% of my Wealth into A "Flexible" Bond portfolio, that included those IShares in Global and EMD's, only because? Many of my reg. Limo Clients strongly suggested to go the All bond route ..

Since 99'? I haven't looked back and It has done as well as Owning Balanced Funds and the Yields have been More than enough to allow me to reinvest 3% of the ave of 6.75% apy on them a yr to maintain Inflation and then some..not to mention their Growth ( ave 11.75% a[y past 10 yrs combined now)

IF the next 10 yrs are anythng like the past? Who Needs Equities? The heck with them!

 

[FinanceDude]

IF the next 10 yrs are anythng like the past? Who Needs Equities? The heck with them!

But they won't be, because the era of inflation or superinflation is almost upon us. Better look at the duration of your bond funds now, because when interest rates go up,you'll see a haircut like Custer got at the Battle of Little Big Horn..........

 

[Kroeran]

the other side of the argument is that this monetarist stimulation will not work due to the classic monetarist liquidity trap that was faced in the 30s...pushing out money and no-one spending, like pushing a string, because we have all become like our depression era grandparents, FIRE forum members and the Japanese...which points to lots of savings and greatly reduced spending and borrowing for at least a couple of generations...which points to indefinitely low interest rates and commodity prices, unless we can find another set of suckers (borrowers) for the ponzi scheme.

In such a situation, the next step is the Kensian defence, which is, if the public won't spend, government must, and beyond the levels of the New Deal, and rather at the levels of WWII to work. As long as debt to GDP does not outpace WWII levels, I am not sure we should be concerned.

 

[FinanceDude]

In such a situation, the next step is the Kensian defence, which is, if the public won't spend, government must, and beyond the levels of the New Deal, and rather at the levels of WWII to work. As long as debt to GDP does not outpace WWII levels, I am not sure we should be concerned.

I think the current Administration is already doing this, and they believe it will work. I think World War II spending levels will be FAR surpassed.......

 

[Kroeran]

in terms of percent of GDP?

answering my own question

http://www.chrismartenson.com/blog/crisis-explained-one-chart-debt-gdp/11570

 

[FinanceDude]

in terms of percent of GDP?

answering my own question

Debt - The crisis explained in one chart: Debt-to-GDP - Jan. 13, 2009 | Blogs at Chris Martenson - Debt, GDP, Government, Inflation, Myths, Policy

So, do you believe me now?

 

[Kroeran]

would it not make sense to move into Canadian dollar denominated instruments?

not much debt

"OTTAWA, July 9 (Reuters) - Canada still aims to reduce its debt-to-GDP ratio to 25 percent, Finance Minister Jim Flaherty said on Thursday, but he could not say how long it might take to reach that goal, which was abandoned during the recession.
Before the global financial crisis, the Conservative government had pledged to reach the 25 percent target by 2011-12. But the budget in January of this year said the debt-to-GDP ratio would rise to about 32 percent in March 2011 from 29 percent and there was no reference at all to the 25 percent target."

 

[Dennis]

But they won't be, because the era of inflation or superinflation is almost upon us. Better look at the duration of your bond funds now, because when interest rates go up,you'll see a haircut like Custer got at the Battle of Little Big Horn..........

Re:Yes, FD and I hope it does! Sound nuts? Well As I recall, way back when, during the Carter Yrs, what was the Interest rates on those LT Treasuries? 15%? for nice 30 yr one's?

I'd be happy to (a) Sell most of my Bonds now and (b) Buy 20 yr LT treas. paying even 8-10% an paying 2 to 2.5% every Qtr? In can take out just 1 qtr ( 2.25%) I need to pay my bills and Reinvest the other 3 qtrs back in My Current Bonds at the Newer rates.. That's the advantage of Owning them in Funds vs Directly. and keeping my Global with Pimco and EMD's with Fido..

The Treasuries will be Bought Directly, thru Treasuary Direct

at least that's the Game plan..

FYI? In 00' I did dump 75% of my other bonds and bought all Treasuries ( VFITX and VUSTX) and did the same in 2nd qtr of 2007..
& sold them In Oct/Nov of 08' and back in with the other 25% that was in my other Bonds..in Jan 09' and that came out ok.

I use the 20/50wk moving ave , Rick Santelli, Wm. Larkin over at Cabot Mgmnt. + Bill Gross & El H. to give me the Red Flags when to be looking at doing this..along with other Advisory sources..

It's a Constant game of Musical Chairs with Bonds, just like with Equities..

 

[Kroeran]

I remember Dad going to the CD broker to roll over a largish bag of cash when interest rates were 18% at the peak...and I said "LOCK IN FOR 5 YEARS!!"

"LOCK IN FOR 5 YEARS!!!!"

he did three years,thinking rates would go higher

I was so mad. Almost as mad as the time he came back from a Florida trip and had bought a mobile home on a leased lot instead of buying a real house.

those were the only 2 mistakes he made, however