Unclemick - What's your view on interest rates

[dex]

Unclemick,
What is your view on interest rates?
The 10yr note is at 4.22% today.
Do you see them going higher in the short term?
I'm looking to buy some individual bonds.
Ultimatly, I belive low interest rates are will be around for a number of years.

[ak4195]

Dex,if i may,im patiently waiting for the same thing,my target is 4.516% on the 10 yr yield.IF seen ill be scooping a few corps,only AA or better and < than par,and somewhere from 5-10 yrs left to maturity.I havent even bothered looking at a wish list yet,seems a bit early.just my opiniona--ak

[haha]

Quote:

Ultimatly, I belive low interest rates are will be around for a number of years.

Could you elaborate on this opinion?

Mikey

[azanon]

Interest rates are low and rising. *Cleary, there are better investments atm than LT corporate bonds.

[unclemick]

I - of course bought long term bonds a couple years ago - not to be contrarian to conventional wisdom - but I needed a small bump in the SO's income stream (Vanguard High Yield Corp.).

Basically I don't care what the interest rate is going to do. Of course - emotionally it is important - heh, heh, heh.

Here's how I live with the paradox.
75% Vanguard Lifestrategy - let the computers at Valley Forge (actually I have no idea where they're located) - rebalance based on the preselected asset mix - and hope the SEC yield is satisfactory (not the portfolio value). 10% Vg. REIT Index as a counterbalancer completes my IRA. At age 61 - may or may not take some out this year.

Income is defined pension, 60% plus DRIP dividend stocks 40% - with 40 stocks, I have wiggle room to sell underperformers to loosely match my dividend stream. Dominated by utes, financial, a few REITs - am heh, heh, - emotionally steeled - for some real steep drops in the interest sensitive issues - my Con ED went from 42 to 25, New Plan Reality 18 to 12 - wherein of course I bought more.

I don't husband cash - I buy what's available if I have some mad money - hopefully bargins.

Otherwise - my asset mix is based on my age and ER stituation - not Mr Market (85%).

Yes - valuations and interest rates/rate of change matter big time - so 85% balanced and to some degree self compensating - SEC Yield is the take out rate if needed (2.8% roughly); and 15% is dividend stocks where the competion from rising interest/rate of change will effect valuations.

I accept conventional wisdom - that we are back to the rising part part of the cycle - but don't plan to do anything about it - except to the extent it 'might' contribute to a buy in an individual stock.

However - if the DOW were to fall 5-6000 points - greed might impell me to go 100% stocks and get rid of bonds.

[azanon]

I went 100% stocks about 2 weeks ago. So far, that's looking like a good decision.

[cute fuzzy bunny]

Quote:

the computers at Valley Forge (actually I have no idea where they're located)

The computer is right here in my office closet.

I just kicked it really hard.

You just bought 30,000 shares of 50 year emerging market bonds in a country that stopped existing 3 years ago.

[cute fuzzy bunny]

Quote:

I went 100% stocks about 2 weeks ago. So far, that's looking like a good decision.

Through the end of the year it might be.

I think you'll regret if if you stay in that position a lot longer than that.

[retire@40]

I'd love to lock in a 7% or higher rate in a long bond or 120 month bank CD when rates climb that high again. I'm hoping this will happen in the next 4 to 6 years.

[dex]

Quote:

Could you elaborate on this opinion? Mikey

Mikey,
I believe there will be a lot of global deflationary pressurs in the world and the USA.
World:
- China, India, Southeast Asia, Russia, and eastern europe's emerging markets providing cheap labor and none of the overhead of the developed countries
- Ageing and stagnant population in Western Europe cutting demand
- Higher taxes in the developed world USA/Europe cutting demand
-USA - higher unemployment and underemployment increase in population caused by outsourcing of jobs and increase in taxes.
Only place for inflaction is commodities but they are not the major cost driver they were in the past.

[unclemick]

I'm not a monetarist or economist - but I think the ability of governments to print money/work the money supply and the world currency market will effect what we see as inflation here.

Somebody needs to sneak over to TH's house and put a lock on his closet. I gots enough bonds for now. heh heh.

I shall continue to assume we are in the rising interest rate part of the business cycle and probably continue to do nothing. Hopefully the speed/rate of increase won't be so fast as to upset any markets drastically. Fast rates of change in either direction make markets nervous.

[cute fuzzy bunny]

Whoops too late! In response to your concern about too many bonds, the "valley forge" computers just bought you 90,000 shares of Martha Stewart Omnimedia and 150,000 shares of Imclone.

[unclemick]

TH

PLEASE sneak into the closet and find a way to kill it. Watch yourself though - remember HAL the computer in 2001 A Space Oddesy.

Perhaps toss in a open box of fresh dryer sheets to weaken it first - although that might send it into a short term bond buying frenzy - a chance one must take.

[cute fuzzy bunny]

I *will* try.

Those commodore 64's are hard to kill though.

Whoops, it just issued a stop-loss order on the imclone stock.

You might be headed to 'camp cupcake' unclemick...

[unclemick]

Oh no! Perhaps I'd better run to the authorities and plea bargin myself into witness protection and identity change - make a case for being under the influence of dryer sheet fumes or something.


sugar! shoot! - I thought I could do the time with my Vanguard TBM in balanced index(4-5 years duration).
But after seeing what happened to Martha - Hmmm, plea bargin may be best.

[cute fuzzy bunny]

Gee you mean you really dont wanna be locked up with several thousand 'bad girls'?

"What happened to Martha" is illustrative of a
primary reason I "dropped out". It makes no sense.
Really, a metaphor for big government/goofy laws
run amok. Trust me folks, the people who deserve
to be imprisoned are running around loose; while an
entrepreneur (may I say hero?) goes to prison.
What is wrong with this picture? What is really depressing, no matter who wins the election the
march to "big brotherism" continues apace.

John Galt

Quote:

"What happened to Martha" is illustrative of a primary reason I "dropped out". *It makes no sense. Really, a metaphor for big government/goofy laws run amok. *Trust me folks, the people who deserve to be imprisoned are running around loose; while an entrepreneur (may I say hero?) goes to prison. What is wrong with this picture? *What is really depressing, *no matter who wins the election the march to "big brotherism" continues apace. John Galt

I hope you were just as disgusted at the Clinton Impeachment Hearings. Cost the taxpayers over 70 Million dollars!

Hi Cut-Throat! Yes, I believe the Clinton impeachment was a
total waste. But, I believe most money spent by our
government is wasted. My attitude is that once they
get it away from us, it will probably be wasted, or
even worse, used to promote something bizarre
and/or anti-American. Alas, I see no slackening of this trend.

John Galt

[cute fuzzy bunny]

Uh oh, I should have known this would turn into a 'poor martha' thread.

She flipped off the cops and burned a lot of the people she needed to back up her transparent lie. Then when she was offered a deal that would have been a sweetheart compared to what she ended up with, she declined and decided to roll the dice with a jury.

A very bad series of decisions.

She was very lucky to get off as easily as she did.