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Old 07-12-2017, 08:00 PM   #21
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I talked to the guy today. At my suggestion, he had checked out the Vanguard website (he's with Fidelity). He seemed interested in Wellesley Admiralty. Any thoughts about this? It's not quite what he originally discussed with me, but I understand all this is a process.

By the way, there are a whole bunch of people in this area (West Los Angeles) who make and have a whole bunch of money (I'm obviously not one of these people--and let me tell you right now, I just hate it when that happens). Anyhow, for a lot of these people, researching investing is a low priority. At least this guy is trying to figure something out.
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Old 07-12-2017, 08:05 PM   #22
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Is that the same as Wellesley fund except higher balance?
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Old 07-12-2017, 08:41 PM   #23
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Yep, that's correct, Fedup. ($50K minimum).
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Old 07-12-2017, 08:52 PM   #24
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That fund has 40% stocks and went down about 9-10% in 2008.
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Old 07-12-2017, 08:58 PM   #25
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I recall having an emerging market fund back then. It's OK with me if you don't check out what emerging market funds did in 2008.
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Old 07-12-2017, 09:07 PM   #26
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I told you it was a stupid question. lol My intention of what I said was 2% clear after tax/inflation.
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Old 07-12-2017, 09:39 PM   #27
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I recall having an emerging market fund back then. It's OK with me if you don't check out what emerging market funds did in 2008.
I don't understand this post. I thought you wrote in your OP, not to lose principal. So it's ok to lose money then.
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Old 07-12-2017, 10:10 PM   #28
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From mid 2008 to March 2009, Wellesley lost 20%. That's still a lot better than other balanced funds. For example, Dodge and Cox Balanced lost 50% because it was heavy in financials.
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Old 07-12-2017, 10:49 PM   #29
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From mid 2008 to March 2009, Wellesley lost 20%. That's still a lot better than other balanced funds. For example, Dodge and Cox Balanced lost 50% because it was heavy in financials.
I thought Wellington lost 20% for 2008. And Wellesley lost 9-10% for 2008. I researched these funds on Morningstar before I considered them. They also have to have 4-5 stars with Gold ratings. I especially pay attention to year 2008, that's the year that distinguishes between men and boys in the investing world. It's easy to make money in a good year. Not so easy in a bad year.
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Old 07-12-2017, 11:20 PM   #30
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We are talking two different time periods. I like to look at performance from top to bottom, instead of per calendar year. When people remember that they had $1M at the highest point, and now they have $700K or $600K as the market bottoms out, that's what they know.

Yes, these funds did very well over this difficult period, when the S&P got down to 44c on the dollar from Nov 2007 to Mar 2009. Yes, a $1M in the S&P got down to as low as $440K. That hurt!

On the other hand, if one had $1M in Wellesley in 2007, he still had $800K at the market bottom in 2009. Far better than $440K in the S&P, or $500K or $600K in some other funds.


PS. I am not trying to scare anybody off the market. I like stocks despite the volatility. Many can't handle it.
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Old 07-13-2017, 01:03 AM   #31
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I think that 5% safe investment that you can get back within a day with a phone call on the other thread is the best....


Only if he would tell us what it is!!!!
I did a little research on that 5% safe return thread. Found out the guy runs an un-registered fund that uses a proprietary algorithm to buy mostly winning Lottery tickets.

Seems reasonable. I'm in.
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Old 07-13-2017, 08:22 AM   #32
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I did a little research on that 5% safe return thread. Found out the guy runs an un-registered fund that uses a proprietary algorithm to buy mostly winning Lottery tickets.

Seems reasonable. I'm in.

ROFLMAO!!


And how did you find out about that

I guess he could tell his trolling here was going to be unproductive with the response he got....
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Old 07-13-2017, 10:23 AM   #33
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...Safety (as in let's not try to lose principal) is a concern. Any ideas?
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I recall having an emerging market fund back then. It's OK with me if you don't check out what emerging market funds did in 2008.
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I don't understand this post. I thought you wrote in your OP, not to lose principal. So it's ok to lose money then.
I can see where my post was confusing. I was just reminiscing about 2008 and what a disaster it was. In any case, I don't think getting 2% without a risk of losing principal is realistic. This guy was just wanting to come close to that (and probably not wanting to tie the money up for a huge amount of years).
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Old 07-13-2017, 11:22 AM   #34
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I can see where my post was confusing. I was just reminiscing about 2008 and what a disaster it was. In any case, I don't think getting 2% without a risk of losing principal is realistic. This guy was just wanting to come close to that (and probably not wanting to tie the money up for a huge amount of years).

But going into stock is not even an option if you do not want 'risk'....

As I mentioned, you can get at least 5% with preferred shares and possibly bonds that are very high rated... with the preferred the prices do not change that much if you pick correctly...
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Old 07-13-2017, 11:39 AM   #35
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But going into stock is not even an option if you do not want 'risk'....

As I mentioned, you can get at least 5% with preferred shares and possibly bonds that are very high rated... with the preferred the prices do not change that much if you pick correctly...

Texas, while what you wrote is correct, the higher yield potential does have a few associated risks.

Those are the risk of a call - the issuing company redeems the preferred shares at par ( usually $25 ) plus about 30 days accrued interest. So anyone buying a preferred above par could well end up losing if a call occurs at the wrong time.

The other risk is that of interest rate - as rates go up, other alternatives ( even other preferreds ) become more attractive, so a preferred stock which is akin to a bond, tends to decline.

And finally, there is always risk of the issuing company going BK, where all shareholders will take a bath, if not lose everything completely.

Oh, and a little known risk called Waldenization.........not known to those who do not invest in Preferred Securities.


So, unfortunately, there are still risks aplenty in the Preferred Stock Sector.
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Old 07-13-2017, 03:16 PM   #36
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Texas, while what you wrote is correct, the higher yield potential does have a few associated risks.

Those are the risk of a call - the issuing company redeems the preferred shares at par ( usually $25 ) plus about 30 days accrued interest. So anyone buying a preferred above par could well end up losing if a call occurs at the wrong time.

The other risk is that of interest rate - as rates go up, other alternatives ( even other preferreds ) become more attractive, so a preferred stock which is akin to a bond, tends to decline.

And finally, there is always risk of the issuing company going BK, where all shareholders will take a bath, if not lose everything completely.

Oh, and a little known risk called Waldenization.........not known to those who do not invest in Preferred Securities.


So, unfortunately, there are still risks aplenty in the Preferred Stock Sector.
I agree with what you say.... but which has more risk.... a diversified fund that has 40% to 60% stock or a group of below call or close to call or even not callable yet bonds and preferred stocks that yield 4% to 5%

And you can get that 4% to 5% with very high ratings, not like what I am doing replacing my HY bond fund...
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Old 07-13-2017, 03:47 PM   #37
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Texas Proud, thanks for the suggestion. And, Coolius, thanks for keeping on eye on Texas Proud.
You guys have become mavens regarding the good, the bad and the in between (Mulligan's Preferred stocks thread). I wish I had started picking up on this when you guys did. But, I didn't.

While Preferreds sound appealing and interesting (it sounds like hunting to find what you're looking for), I just don't know enough (like zero) about Preferreds to recommend them. But, they've seemed like a good idea to me for a very long time. Instead, I may have wandered down the dividend stock path--which also involves some sort of hunting, but I don't think it's quite as sophisticated as what you guys do.
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Old 07-14-2017, 10:34 AM   #38
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Redduck,

The area of Preferred stock is not that difficult. Preferreds combine characteristics of both stocks & bonds, and like all other securities, have advantages & disadvantages.

You can easily check out various websites on the internet to learn about them. Mulligan & I also post on the Income Investing thread at the Silicon Investor website.

And the Preferred Stock thread is always there for you to browse, ask questions, brainstorm, etc.

You might well find Preferred Stock ( & baby bonds ) suitable for a portion of your portfolio.
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Old 07-14-2017, 10:45 AM   #39
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I agree with what you say.... but which has more risk.... a diversified fund that has 40% to 60% stock or a group of below call or close to call or even not callable yet bonds and preferred stocks that yield 4% to 5%

And you can get that 4% to 5% with very high ratings, not like what I am doing replacing my HY bond fund...


For us ER types, no question that Preferreds/Bonds provide a greater degree of SWAN. Income stability but little growth potential, and a higher position on the stakeholder's totem pole.

The problem at this time is the high valuation of the entire Preferred sector, bargains are difficult to find.

Look at WFC-L, for example. I was recommending it a few months back at $1,200. It is now 8% higher. Definitely not a buy at this point, IMO.
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Old 07-14-2017, 10:51 AM   #40
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It's a long thread, but when I have time I will get over there.
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