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Old 09-18-2020, 04:19 PM   #61
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I've had all of my corporate bonds called in over the last year, with only Treasuries and Muni's left. Instead of "fighting the Fed," I've ramped up my index option trading with the goal of producing a bond-like yield with good success. It's not extremely risky, but the learning curve is very steep.
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Old 09-18-2020, 04:48 PM   #62
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VBIRX (ETF equivalent BSV) may be worth considering. Short (1-3 duration), 70% U.S. Government bonds 30% corporates and has never had a losing year (not to say it couldn't happen in the future). So far it's the least risky bond fund I've found with a positive real return.
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Old 09-18-2020, 04:53 PM   #63
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Originally Posted by ShokWaveRider View Post
We have CD's @ ~4% till August 2021.
Oh you just stop bragging right now..



I just rescued some of my CD cash today- it needs a new home so it is going to one of these three spots

1. .90% savings account at CFG bank
2. Bonus surfing with TD bank and others
3. My fave ST bond funds and similar

And I have a bunch more that will need to be rescued in Dec.
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Old 09-18-2020, 05:40 PM   #64
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My banker called me and suggested ClarkCapital Management group. Ccmg.com navigator multi strategy 25-75. The average annualized return is 6.8%. He claims its totally liquid. Fees though 1.23%

What do you all think?
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Old 09-18-2020, 05:48 PM   #65
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Originally Posted by bigadventure View Post
My banker called me and suggested ClarkCapital Management group. Ccmg.com navigator multi strategy 25-75. The average annualized return is 6.8%. He claims its totally liquid. Fees though 1.23%

What do you all think?
I think your banker will get a nice slice of that 1.23% if you say yes.

I also think 6.8% in today’s environment sounds too good to be true - and if it sounds too good to be true...
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Old 09-18-2020, 06:25 PM   #66
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Just now scanned Fidelity for individual bonds... coupon rates... not hard to make money here... and there are no fees to pay anyone...

Apple - 4.65%
Apple - 4.50%
Ford - 9.98%
Ford -8.9%
Microsoft - 5.3%
At&T - 9.45%
At&T - 8.75%
GE-7.5%

you want tax free muni bonds... coupons at 5%... your pick... :-)
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Old 09-18-2020, 07:39 PM   #67
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Originally Posted by MichaelB View Post
There’s a thread where members report current rates for CDs and other similar options, here https://www.early-retirement.org/for...101376-19.html

A great site for CD/Savings etc. rates and analyses of banks and credit unions is depositaccounts.com. Good luck!
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Old 09-18-2020, 07:58 PM   #68
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Originally Posted by ShokWaveRider View Post
We have CD's @ ~4% till August 2021.
Hey....4% is GREAT! And so is your clever quote!
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Old 09-18-2020, 08:02 PM   #69
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Quote:
Originally Posted by Montecfo View Post
Oh you just stop bragging right now..



I just rescued some of my CD cash today- it needs a new home so it is going to one of these three spots

1. .90% savings account at CFG bank
2. Bonus surfing with TD bank and others
3. My fave ST bond funds and similar

And I have a bunch more that will need to be rescued in Dec.
I've been putting some cash into baby bonds... specifically AGO.PRB... Baa2/A rated and 6.51% yield also PBC... Baa3/BBB- ratedand 6.63% yield.... not CDs but I'm accepting some credit risk in exchange for attractive yield.
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Old 09-18-2020, 08:13 PM   #70
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Originally Posted by REWahoo View Post
I think your banker will get a nice slice of that 1.23% if you say yes.

I also think 6.8% in today’s environment sounds too good to be true - and if it sounds too good to be true...
It's not a guaranteed 6.8%... 6.8% is the 5 year gross total return but fees are 3% according to this factsheet: https://www.ccmg.com/Public/_pdf/_cu...tegy_25-75.pdf

I would invest in SWAN before that 25/75 product.... but both are far away from being CDs or even close to CDs.
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Old 09-18-2020, 08:21 PM   #71
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Correct about the 3%, but they were giving me a discount to 1.23%.
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Old 09-18-2020, 08:29 PM   #72
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Originally Posted by dixter View Post
Just now scanned Fidelity for individual bonds... coupon rates... not hard to make money here... and there are no fees to pay anyone...

Apple - 4.65%
Apple - 4.50%
Ford - 9.98%
Ford -8.9%
Microsoft - 5.3%
At&T - 9.45%
At&T - 8.75%
GE-7.5%

you want tax free muni bonds... coupons at 5%... your pick... :-)


Yah the coupons are great but what do the yields say? I see an Apple 4.65 coupon for 25yrs and the yield is 2.5. I am not ready to go that long for that low, at least not yet.
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Old 09-18-2020, 09:39 PM   #73
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Yah the coupons are great but what do the yields say? I see an Apple 4.65 coupon for 25yrs and the yield is 2.5. I am not ready to go that long for that low, at least not yet.
you do know that you don't have to buy a bond for its yield at maturity right?

for example... you buy a bond that pays out 9% coupons for 30yrs... you keep the bond for say 20yrs and you collect the 9% coupon each year for the 20yrs and then you just sell the bond like you would a stock... you don't care what the yield to maturity is cause you won't own the bond at maturity...
You get the 9% each year and they don't charge you anything to have it year to year... and if you buy it today and don't like it or need the money next week you just sell it back and get your money back...
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Old 09-18-2020, 10:10 PM   #74
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dixter... have you ever bought a bond?

In the example that you cite you don't get 9% on your investment... if the yield is lower than the coupon you pay a premium so your return is the yield to maturity unless interest rates change.
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Old 09-19-2020, 04:39 AM   #75
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I have bought and sold several bonds over my life span... and if you pay attention then ALL bonds vary in value... what you say is true MOST of the time.... not allways, there are other factors that affect a bonds price.... I have seen many bonds that actually go up in face value even when the interest rates go up also.... if a bond is selling above prime value ( $1000 at prime ) then that only affects the yield when you sell the bond or it matures, it never ever affects the yield while you hold the bond and collect the coupons... an example of not caring about the yield return... you are say 62 yrs old, you determine that you want a bond to pay out until after you die... so you think... 35 yrs would be a good life span, that puts you at 97 yrs old when you hope to last too... so you buy a bond that matures at 40 yrs... you collect the 9% coupon for your life span and when the bond matures 40 yrs latter who ever you gave your bond to when you died will get $1000/bond at its maturity... and yes... this exact example is available today.. right now... I'll take the 9% coupon for 35+ years over a .05% bank any day... and guess what... I don't even need to worry about the yield.. ever
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Old 09-19-2020, 04:46 AM   #76
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Originally Posted by pb4uski View Post
dixter... have you ever bought a bond?

In the example that you cite you don't get 9% on your investment... if the yield is lower than the coupon you pay a premium so your return is the yield to maturity unless interest rates change.
The only time the yield comes into play is when/if you sell a bond or it matures..

If you buy a bond and its face value is above par (par=$1000) and you sell it before it matures the yield is determined at that time of sell... if you sell the bond above what your original cost was then your yield is better, but even if you sell at what you paid for it you still got the 9% coupon... the coupon rate doesn't change over the life of the bond...

remember you have 9% coupon AND potential yield... and if you hold the bond to maturity then you get the face value back ($1000/bond)

There are no early withdraw penalties either... this isn't that hard...
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Old 09-19-2020, 05:14 AM   #77
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dixter, you are confused. You say:
Quote:
....if a bond is selling above prime value ( $1000 at prime ) then that only affects the yield when you sell the bond or it matures, it never ever affects the yield while you hold the bond and collect the coupons...
That is false.... not the way it works.

To begin with, bonds don't have a prime value... the $1,000 is par value. So let's say you have this mythical bond with a 30 year remaining term and a coupon of 9% and because interest rates are lower than when the bond was issued the value has increased and you need to pay $1,500 to acquire it.

In the first year, you receive interest of $90 ($1,000 par value * 9% coupon rate)... your yield is 5.54% [=RATE(30,90,-1500,1000)=5.54%]. The simple fact that in the first year you only receive $90 of interest on a $1,500 cash outlay/investment is proof positive that your return is less than 9%!

The only way you can achieve a yield of 9% is to buy the bond for par of $1,000, but because market interest rates are lower you have to pay more than $1,000 for a 9% coupon, and that extra $500 that you pay reduces the effective yield below 9% to 5.54%.

IRR5.54%
0-1,500
190
290
390
490
590
690
790
890
990
1090
1190
1290
1390
1490
1590
1690
1790
1890
1990
2090
2190
2290
2390
2490
2590
2690
2790
2890
2990
301,090

Math is hard dixter.

Bond Amortization Calculator     
      
Bond Details RateYearsNo. paymentsAmount
Bond details 9.00% 30 1 1,000.00
      
Bond Issue Price     
Bond Issue price 5.54%  1,500.00
Premium    500.00
      
Effective Interest Method Amortization Schedule     
Period Opening Interest Payment Closing Premium
11,500.00 83.15 90.00 1,493.15 6.85
21,493.15 82.77 90.00 1,485.92 7.23
31,485.92 82.37 90.00 1,478.29 7.63
41,478.29 81.95 90.00 1,470.23 8.05
51,470.23 81.50 90.00 1,461.73 8.50
61,461.73 81.03 90.00 1,452.76 8.97
71,452.76 80.53 90.00 1,443.29 9.47
81,443.29 80.01 90.00 1,433.29 9.99
91,433.29 79.45 90.00 1,422.75 10.55
101,422.75 78.87 90.00 1,411.61 11.13
111,411.61 78.25 90.00 1,399.86 11.75
121,399.86 77.60 90.00 1,387.46 12.40
131,387.46 76.91 90.00 1,374.37 13.09
141,374.37 76.19 90.00 1,360.56 13.81
151,360.56 75.42 90.00 1,345.98 14.58
161,345.98 74.61 90.00 1,330.59 15.39
171,330.59 73.76 90.00 1,314.35 16.24
181,314.35 72.86 90.00 1,297.20 17.14
191,297.20 71.91 90.00 1,279.11 18.09
201,279.11 70.90 90.00 1,260.02 19.10
211,260.02 69.85 90.00 1,239.86 20.15
221,239.86 68.73 90.00 1,218.59 21.27
231,218.59 67.55 90.00 1,196.14 22.45
241,196.14 66.31 90.00 1,172.45 23.69
251,172.45 64.99 90.00 1,147.44 25.01
261,147.44 63.61 90.00 1,121.04 26.39
271,121.04 62.14 90.00 1,093.19 27.86
281,093.19 60.60 90.00 1,063.78 29.40
291,063.78 58.97 90.00 1,032.75 31.03
301,032.75 57.25 90.00 1,000.00 32.75
__________________
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Old 09-19-2020, 06:43 AM   #78
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Quote:
Originally Posted by dixter View Post
you do know that you don't have to buy a bond for its yield at maturity right?

for example... you buy a bond that pays out 9% coupons for 30yrs... you keep the bond for say 20yrs and you collect the 9% coupon each year for the 20yrs and then you just sell the bond like you would a stock... you don't care what the yield to maturity is cause you won't own the bond at maturity...
You get the 9% each year and they don't charge you anything to have it year to year... and if you buy it today and don't like it or need the money next week you just sell it back and get your money back...
Yes I know, but I agree with PB4's analysis and comments. Many of us are in the same boat searching for CD alternatives and if anyone is unfamiliar with how bonds work your disregard for yield is misleading. By saying the yield doesn't matter, you are essentially saying the price paid doesn't matter. In fact the purchase price and the selling price (if you sell your 30 yr bond after 20 yrs) will make a huge impact on the yield of your bond.
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Old 09-19-2020, 06:53 AM   #79
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Dixter has never calculated his return. He doesn't seem to understand that his 9% fat coupon is not his return.
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Old 09-19-2020, 07:01 AM   #80
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Quote:
Originally Posted by pb4uski View Post
dixter, you are confused. You say: That is false.... not the way it works.

To begin with, bonds don't have a prime value... the $1,000 is par value. So let's say you have this mythical bond with a 30 year remaining term and a coupon of 9% and because interest rates are lower than when the bond was issued the value has increased and you need to pay $1,500 to acquire it.

In the first year, you receive interest of $90 ($1,000 par value * 9% coupon rate)... your yield is 5.54% [=RATE(30,90,-1500,1000)=5.54%]. The simple fact that in the first year you only receive $90 of interest on a $1,500 cash outlay/investment is proof positive that your return is less than 9%!

The only way you can achieve a yield of 9% is to buy the bond for par of $1,000, but because market interest rates are lower you have to pay more than $1,000 for a 9% coupon, and that extra $500 that you pay reduces the effective yield below 9% to 5.54%.

IRR5.54%
0-1,500
190
290
390
490
590
690
790
890
990
1090
1190
1290
1390
1490
1590
1690
1790
1890
1990
2090
2190
2290
2390
2490
2590
2690
2790
2890
2990
301,090

Math is hard dixter.

Bond Amortization Calculator     
      
Bond Details RateYearsNo. paymentsAmount
Bond details 9.00% 30 1 1,000.00
      
Bond Issue Price     
Bond Issue price 5.54%  1,500.00
Premium    500.00
      
Effective Interest Method Amortization Schedule     
Period Opening Interest Payment Closing Premium
11,500.00 83.15 90.00 1,493.15 6.85
21,493.15 82.77 90.00 1,485.92 7.23
31,485.92 82.37 90.00 1,478.29 7.63
41,478.29 81.95 90.00 1,470.23 8.05
51,470.23 81.50 90.00 1,461.73 8.50
61,461.73 81.03 90.00 1,452.76 8.97
71,452.76 80.53 90.00 1,443.29 9.47
81,443.29 80.01 90.00 1,433.29 9.99
91,433.29 79.45 90.00 1,422.75 10.55
101,422.75 78.87 90.00 1,411.61 11.13
111,411.61 78.25 90.00 1,399.86 11.75
121,399.86 77.60 90.00 1,387.46 12.40
131,387.46 76.91 90.00 1,374.37 13.09
141,374.37 76.19 90.00 1,360.56 13.81
151,360.56 75.42 90.00 1,345.98 14.58
161,345.98 74.61 90.00 1,330.59 15.39
171,330.59 73.76 90.00 1,314.35 16.24
181,314.35 72.86 90.00 1,297.20 17.14
191,297.20 71.91 90.00 1,279.11 18.09
201,279.11 70.90 90.00 1,260.02 19.10
211,260.02 69.85 90.00 1,239.86 20.15
221,239.86 68.73 90.00 1,218.59 21.27
231,218.59 67.55 90.00 1,196.14 22.45
241,196.14 66.31 90.00 1,172.45 23.69
251,172.45 64.99 90.00 1,147.44 25.01
261,147.44 63.61 90.00 1,121.04 26.39
271,121.04 62.14 90.00 1,093.19 27.86
281,093.19 60.60 90.00 1,063.78 29.40
291,063.78 58.97 90.00 1,032.75 31.03
301,032.75 57.25 90.00 1,000.00 32.75
Yup, just went through the calculation myself.
No free yield lunch, Dixter.
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