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05-25-2022, 02:43 PM
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#1
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Full time employment: Posting here.
Join Date: Jul 2008
Location: Weatherford, Texas
Posts: 628
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Bondholders Plans
I recently sold my bond fund and have spent the last week picking up 3-4 month treasuries, corporate bonds, muni's and c.d.'s.. My preference is to avoid bond funds and ETF's in the future but I'm not sure about what I do want to do. I'm not real comfortable buying longer term corporates. I worry about defaults. That's what attracted me to funds years ago. For those bond investors; what are you doing, what are your plans and what are you waiting for?
__________________
Life is good. Then you die.
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05-25-2022, 03:02 PM
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#2
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Moderator Emeritus
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 15,038
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 Quote:
Originally Posted by lawman
..........and what are you waiting for?
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More FED rate hikes and to be ready around the end of the year to buy bonds with higher yields at discount. In the interim, I am buying 2 and 3 month T Bills to generate a bit of cash.
I am also playing golf weekly and having fun.
Oh, to add....watching my energy and pipeline stocks go up.
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
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05-25-2022, 03:28 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 4,908
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No guessing for me, just staying true to my ladder. If you follow a ladder strategy it hedges for interest rate risk.
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05-25-2022, 03:39 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,184
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Went to shorter duration funds about 4 years ago.
Let my AA drift up from 60/40 to almost 70/30 (Mister Market dragged back down a bit.) over the last year or so.
Been buying 1 to 3 year corporates for the last 3 years instead of adding to bond funds.
Sold a bit for this and next year's living expenses.
Probably just going to sit on my hands for now.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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05-25-2022, 03:51 PM
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#5
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Full time employment: Posting here.
Join Date: Jul 2008
Location: Weatherford, Texas
Posts: 628
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I really got burned on my intermediate corp. bond fund. I knew rising rates would cause share price to go down.I just didn't think it would be so severe and so fast..
__________________
Life is good. Then you die.
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05-25-2022, 03:52 PM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 6,687
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What is your asset allocation and time horizon?
I don’t have enough with a single issuer to worry about defaults and I avoid B rated issues. Not alot out there right now but I’m waiting for an opportunity that I believe to be around the corner.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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05-25-2022, 03:53 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jan 2020
Location: Milwaukee
Posts: 2,384
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I cannot recall from your many threads exploring bond strategies if you wanted a ladder or not. If you want the "ladderability" feature of individual corporate issues, and the diversification of funds, you could use Ivesco Bullet Shares or Blackrock's iShares iBond ETFs. (The latter not to be confused with Treasury I-Bonds.)
__________________
The closing years of life are like the end of a masquerade party, when the masks are dropped. -Arthur Schopenhauer, philosopher (1788-1860)
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05-25-2022, 04:01 PM
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#8
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Full time employment: Posting here.
Join Date: Jul 2008
Location: Weatherford, Texas
Posts: 628
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Quote:
Originally Posted by Out-to-Lunch
I cannot recall from your many threads exploring bond strategies if you wanted a ladder or not. If you want the "ladderability" feature of individual corporate issues, and the diversification of funds, you could use Ivesco Bullet Shares or Blackrock's iShares iBond ETFs. (The latter not to be confused with Treasury I-Bonds.)
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Not interested in ladders but will vary maturity dates where I see acceptable returns.. What I'm trying to avoid is a crashing share price that can happen with funds.
__________________
Life is good. Then you die.
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05-25-2022, 04:12 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 4,908
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Quote:
Originally Posted by lawman
Not interested in ladders but will vary maturity dates where I see acceptable returns.. What I'm trying to avoid is a crashing share price that can happen with funds.
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If you buy an individual bond, it will return to par at maturity - its original value. Funds have no par.
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05-25-2022, 04:31 PM
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#10
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2013
Posts: 8,444
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Quote:
Originally Posted by lawman
I recently sold my bond fund and have spent the last week picking up 3-4 month treasuries, corporate bonds, muni's and c.d.'s.. My preference is to avoid bond funds and ETF's in the future but I'm not sure about what I do want to do. I'm not real comfortable buying longer term corporates. I worry about defaults. That's what attracted me to funds years ago. For those bond investors; what are you doing, what are your plans and what are you waiting for?
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I sold all our bond funds early in the year and put the money into short term Treasuries waiting for rates to climb and prices to level off. Right now I have mostly stable value, a TIPS ladder and the short term treasuries for fixed income. We will start buying more TIPS at auction again soon as the real yields go up.
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Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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05-25-2022, 05:56 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Aug 2016
Location: Northern Virginia
Posts: 4,556
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Treasuries and floating rate funds at the moment.
In better times I see BOND funds as having a decent value proposition. But now the just make little sense due to duration, IMHO.
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05-25-2022, 07:51 PM
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#12
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 6,687
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Quote:
Originally Posted by lawman
Not interested in ladders but will vary maturity dates where I see acceptable returns.. What I'm trying to avoid is a crashing share price that can happen with funds.
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The individual bond prices will follow interest rates just as bond funds do, but if you hold to maturity bond will return to par. Bond funds don't have a maturity date. If you cannot ignore the crashing share price, individual bonds might not work for you either.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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05-25-2022, 08:44 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Jan 2020
Location: Milwaukee
Posts: 2,384
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Quote:
Originally Posted by lawman
Not interested in ladders but will vary maturity dates where I see acceptable returns.. What I'm trying to avoid is a crashing share price that can happen with funds.
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Okay, maybe I should not have specified these in terms of ladders. How about "funds with a specific, defined maturity date"?
__________________
The closing years of life are like the end of a masquerade party, when the masks are dropped. -Arthur Schopenhauer, philosopher (1788-1860)
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