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Old 04-23-2020, 02:27 PM   #41
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Yeah, FXNAX is up like 4.85% YTD.
Not sure what anyone thinks of Morningstar, but they like it:

https://www.morningstar.com/articles...core-bond-fund
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Old 04-24-2020, 03:54 PM   #42
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I have both. Two years of cash and a mix of short/intermediate/total bond funds
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Old 04-24-2020, 04:53 PM   #43
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I had Six 26 week Treasury Bills, and kept rolling them over til rates went to 0.156%, so my emergency funds are moving back to a higher interest online MM account for now.
The only Bonds I have are in my Vanguard Wellesley ROTH IRA and Wellington Taxable mutual funds.
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Old 04-24-2020, 04:59 PM   #44
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I use CEF (Close End Fund) to get monthly income and invest in investment grade bonds. Also, my SS and monthly pension covers all my monthly expenses. So, my AA allocation is geared more towards equities. In the future, I will further decrease my bond allocations. Do have VAIPX, Vanguard inflation protection funds also. Best time to buy them when the inflation is low.
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Old 04-24-2020, 05:43 PM   #45
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What does "AGG type" funds mean?
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Old 04-24-2020, 05:58 PM   #46
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How much are people willing to go to cash reserves from bonds at this time? How much and why?
I reallocated my 60/40 portfolio to 100% treasuries in 2019 after the yield curve inverted and I did not believe the record breaking bull run was going to last forever.

Cash makes 0% while my VUSUX 1 year performance is +31.96% and the 1st quarter 2020 performance is +20.86% during the crash. To understand this, you need to click the link below and review the historical returns in 2007 and 2008 during the last crash.

https://investor.vanguard.com/mutual...lative-returns

I do not fear low interest rates since the interest return plus the capital return = total return. It is the total return that matters. To understand the portfolio holdings of VUSUX. you need to click the link below:

https://investor.vanguard.com/mutual...folio-holdings

Note the maturity dates and the coupon rates of the bonds. Just because current treasuries rates are zero or even negative, the current coupon rates and maturity dates DO NOT change. There are some 0% bonds but not many. Note the difference between the face value and market value and this difference is contributing to the strong recent performance of VUSUX.

I was knowledgable of the historical returns of VUSUX and the fact that during a crash, investors tend to dump their equities and buy treasures. Remember that "interest rates" and "capital value" moves in opposite direction. I want the interest rates to decline to increase the value of my portfolio. I only humbly suggest that investors should learn about the pros and cons of treasuries.
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Old 04-24-2020, 06:18 PM   #47
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What does "AGG type" funds mean?
AGG is a ETF core aggregate bond fund.
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Old 04-24-2020, 07:11 PM   #48
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....I only humbly suggest that investors should learn about the pros and cons of treasuries.
I don't see anything humble in your posts at all.
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Old 04-24-2020, 07:21 PM   #49
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I don't see anything humble in your posts at all.

+1. (nothing humble in that one) Personally I want nothing to do with a high concentration of long dated treasuries in my "safe" money bucket. Not with rates where they are today.
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Old 04-24-2020, 07:22 PM   #50
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What does "AGG type" funds mean?
Agg type bond index funds are ones that track the Bloomberg Barclays Aggregate US Bond Index. https://en.m.wikipedia.org/wiki/Bloo...ate_Bond_Index

AGG is an ETF that tracks this index, but it is not the index itself, and should not be used as a reference, because it sometimes trades at a premium or discount. A month ago it was trading at a wide discount.
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Old 04-24-2020, 07:30 PM   #51
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+1. (nothing humble in that one) Personally I want nothing to do with a high concentration of long dated treasuries in my "safe" money bucket. Not with rates where they are today.
+1 a lot of interest rate risk with a duration of 18.3 one would not want to get caught flat-footed if rates start rising.
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Old 04-24-2020, 08:32 PM   #52
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+1 a lot of interest rate risk with a duration of 18.3 one would not want to get caught flat-footed if rates start rising.

You really do not understand how a treasury mutual fund work.

If though there are bonds within VUSUX with an average duration 18.3 years, you can buy and sell VUSUX shares within the same year or even within the same month.... so you have liquidity just like a equity mutual fund or a total bond index fund which may also have long term treasuries with a duration of 18.3 years.

In fact, when the interest do rise, I have the option to sell all my shares of VUSUX and buy equities or another asset class when the time comes.

VUSUX has a minimum $50,000 buy in. However, there is a similar Long term treasuries mutual fund VUSTX with a minimum $3,000 buy in. VUSTX has slightly higher expense ratio.

People had contacted me via private emails on questions on treasuries. I usually responded that the best way to learn about treasuries is to invest $3,000 in VUSTX. All investors should go through a learning curve in different asset classes. However, that is your choice whether you want to learn something new or not.
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Old 04-24-2020, 09:39 PM   #53
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Yes, I understand that you can sell if you see rates rising... hence the flat-footed comment. You did read that did you not? Why was it so confusing to you?
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Old 04-25-2020, 03:19 AM   #54
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What does "AGG type" funds mean?
Funds which attempt to track the Bloomberg Barclays Aggregate US bond index which is a capitalization weighted index of intermediate term investment grade US bonds.
https://en.wikipedia.org/wiki/Bloomb...ate_Bond_Index
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Old 04-25-2020, 04:34 AM   #55
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Yes, I understand that you can sell if you see rates rising... hence the flat-footed comment. You did read that did you not? Why was it so confusing to you?
Ok I get your flat footed comment now. I got confused with tdv2 original comment and I should have quoted tdv2 comment and not your comment in my response. Anyway I hope my previous comments were helpful to people who are not familiar with treasury bond mutual funds. I originally had a total market index bond fund but I started to learn the differences between high yield bonds, AAA bonds, treasury bonds, etc during a bear market and during a bull market. The only bond that rises during a bear market are treasury bonds. During a bull market, treasuries tend to perform poorly because investors tend to take money from treasuries and into equities. If the dow zoom past 29555, then I will do the same.
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Old 04-25-2020, 05:37 AM   #56
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Ok I get your flat footed comment now. I got confused with tdv2 original comment and I should have quoted tdv2 comment and not your comment in my response. Anyway I hope my previous comments were helpful to people who are not familiar with treasury bond mutual funds. I originally had a total market index bond fund but I started to learn the differences between high yield bonds, AAA bonds, treasury bonds, etc during a bear market and during a bull market. The only bond that rises during a bear market are treasury bonds. During a bull market, treasuries tend to perform poorly because investors tend to take money from treasuries and into equities. If the dow zoom past 29555, then I will do the same.

As far as I am concerned you have provided no explanation of how a bond mutual fund works. What you have implied is that you can move in and out of long and short treasuries as well as equities to capture large returns. At the end of the day there are two types of assets....risky ones and safe ones. For those of us constructing portfolios (not trading in and out of large positions) choosing the right mix is what it is all about.
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Old 04-25-2020, 06:19 AM   #57
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As far as I am concerned you have provided no explanation of how a bond mutual fund works. What you have implied is that you can move in and out of long and short treasuries as well as equities to capture large returns. At the end of the day there are two types of assets....risky ones and safe ones. For those of us constructing portfolios (not trading in and out of large positions) choosing the right mix is what it is all about.
The explanation is the links that I already provided. Trading in and out of large positions are what some investors do ...but not all. Results really matters. I am providing information and knowledge. If you do not want to use additional knowledge from the links that i provided, that is perfectly fine. However do not believe that choosing the right mix and being passive is the only way to go. Being pro-active is another way provided you have more knowledge.

Case in point. This nation was passive when the corona virus hit due to lack of knowledge but next time I expect this nation will be more pro-active. I got caught being passive during the last recession in 2008 just like everyone else. This time I was prepared. I became more pro-active and here are the result: "This is my best bear market ever". I will let you argue with success. In the future in about 10 years when the yield curve inverts, i will continue to be pro-active and you can continue to be passive and you can ignore the opportunities that treasuries can potentially provide in the links that I provided. That is your choice which I respect since I was a passive investor in 2008.
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Old 04-25-2020, 08:36 AM   #58
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tdv2, I think what vchan2177 is saying is that by holding the long-treasury fund he can get the benefit of a higher yield while it lasts and then get out of it when rates start to rise and the NAV starts to drop.

The thing is that the SEC yield of VGLT is only 1.19% and the portfolio average yield to maturity is only 1.3% and distribution yield based on the last 3 months is only 1.86%... so the income isn't all that attractive given the interest rate risk.

With those low yields in relation to duration it seems like it is just mostly a capital gains play... buy at $104.12, put in a stop loss to protect yourself and try to ride it up and sell at a gain.... but since rates are already so low it look like the opportunity to eek out a gain in the near term is limited unless rates do indeed go negative.
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Old 04-25-2020, 08:56 AM   #59
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tdv2, I think what vchan2177 is saying is that by holding the long-treasury fund he can get the benefit of a higher yield while it lasts and then get out of it when rates start to rise and the NAV starts to drop. ...
Yup. Great scheme. All it requires is that the investor can see the future. There are a lot of schemes like that.
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Old 04-25-2020, 09:16 AM   #60
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I really appreciate a lot of the input in this thread, as I've never really been a bond buyer, especially over the past 10 years.

I have dipped my toes into it, as a capital preservation holding, buying funds/etf's and even actual bonds/cds via brokerage website.

I will say, I've found the bond fund/etf purchasing a LOT easier than buying an individual bond. I have not tried Schwab to buy a bond/treasury yet.

I've been pleased with BND during this time, and welcome folks discussing their favorite choices.
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