Fixed Income Investing II

[Healthy Lifestyle]

Mostly corporates, agency bonds and 4 taxable muni bonds - 29 holdings all together. The rest is tax free muni bonds.

Thx - I can just about keep up with a handful or two with my lazy arse.

 

[COcheesehead]

Thx - I can just about keep up with a handful or two with my lazy arse.

I have close to 200 bonds total. I use Fidelity’s fixed income analysis tool which makes it relatively pain free. I read the IEs and MEs too.

 

[jazz4cash]

I have close to 200 bonds total….I read the IEs and MEs too.

That’s a lot of reading!

 

[COcheesehead]

That’s a lot of reading!

It seems like a lot, but I can go weeks without any, then get 10, then 2 or 3. Then nothing for weeks. Some are just a sentence so it’s pretty easy.
They are the best heads up on what is going on with your bonds. I have taken action on bonds just based on the MEs.

 

[jazz4cash]

It seems like a lot, but I can go weeks without any, then get 10, then 2 or 3. Then nothing for weeks. Some are just a sentence so it’s pretty easy.

They are the best heads up on what is going on with your bonds. I have taken action on bonds just based on the MEs.

My NYC transit munis seem to issue ME every time someone jumps the turnstile.

 

[Texas Proud]

I have close to 200 bonds total. I use Fidelity’s fixed income analysis tool which makes it relatively pain free. I read the IEs and MEs too.

WHAT!!!! Fidelity has a tool for this.... why did you not say sooner...




Edit... OK... looked quickly and did not see anything... where is it?

 

[Chuckanut]

I suspect our risk profiles are different.

I am finding a lot of bond income investors sale their yachts through deeper and colder waters than my investment rowboat will safely traverse. But, I appreciate their thoughts and have learned a lot. I am very glad for this opportunity to beef up my income investments with very safe bonds from the treasury dept and the agencies, as well as FDIC CDs.

One would have to a very incompetent individual bond/CD investor not to be happy these days.

 

[jazz4cash]

WHAT!!!! Fidelity has a tool for this.... why did you not say sooner...




Edit... OK... looked quickly and did not see anything... where is it?

Click on the 1st column (name of security) in positions view. You get a dropdown menu choice of
View details position, or
View fixed income analysis

 

[COcheesehead]

WHAT!!!! Fidelity has a tool for this.... why did you not say sooner...




Edit... OK... looked quickly and did not see anything... where is it?

It can be found in multiple ways.

It’s a link under Fixed Income - Bond Tools

Or

Click on any fixed income holding and it’s the second link down - fixed income analysis for your bond holdings.

Or

And the easiest way - search “fixed income analysis tool” in the Fidelity search box.

 

[jazz4cash]

The tool has many options to customize the view/analysis

 

[COcheesehead]

The tool has many options to customize the view/analysis

Yes, very powerful.

 

[Montecfo]

I am finding a lot of bond income investors sale their yachts through deeper and colder waters than my investment rowboat will safely traverse. But, I appreciate their thoughts and have learned a lot. I am very glad for this opportunity to beef up my income investments with very safe bonds from the treasury dept and the agencies, as well as FDIC CDs.

One would have to a very incompetent individual bond/CD investor not to be happy these days.

Same.

Since I am primarily an equity investor I am not looking for much risk in my bond portfolio.

But some folks are all or mainly bonds. They may understandably be looking for an array of different risk levels in bonds.

I invest in junk bonds and reits for example but I consider such investments part of my equity portfolio.

But if I can get 6%+ for 5 years+ high investment grade without call risk, that is an attractive alternative to equities as I see it.

 

[Quattro73]

I have a large equity allocation that I will begin switching to bonds at the parameters I noted.

Are you retired or in accumulation ?

 

[Montecfo]

Are you retired or in accumulation ?

Retired.

 

[Montecfo]

Let me be a bit more clear. I am 65% equities. Comfortable with my allocation but I would switch say up to 5% more into bonds at parameters stated.

 

[COcheesehead]

I suspect our risk profiles are different.

We are over funded so equities don’t need to carry much of the weight, if any, of our retirement load. We likely will die with more than we retired with.

 

[Quattro73]

Retired.

Accumulation here, but I know my average spend, know my savings rate, and know my desired time frame. With 6% I have little desire to take on much more equity risk so i can “get to the finish line”.

I am in that weird stage that i don’t think enough is written about. I think I can finally see the goal down the road in the distance. I cannot let my foot off the gas, but I don’t want to fly off into the ditch either. Sort of driving me crazy actually.

 

[Texas Proud]

It can be found in multiple ways.

It’s a link under Fixed Income - Bond Tools

Or

Click on any fixed income holding and it’s the second link down - fixed income analysis for your bond holdings.

Or

And the easiest way - search “fixed income analysis tool” in the Fidelity search box.

OK... thanks.... now I have to set up a portfolio as most of mine are in Schwab...



DANG... does not take my preferred shares... I have a lot more of these than actual bonds...

 

[pb4uski]

^^^ I couldn't find a suitable tool so I built my own in Excel.

The central sheet is a "data" sheet that has the following for each holding: CUSIP/Ticker, Issuer Name, Type, Coupon (YTM if bolded), Cpns/Year, Maturity Date, Call Price, Next Call, Purchase Date, Purchase Price, Par Value per unit, QTY, Purchase Cost, Par Value, Account, Moody’s Rating, S&P Rating.

On that data sheet I also compute Annual Income (par * coupon) and Maturity Year (year of the Maturity Date field which is used for maturity distribution analyses).

I include Ticker in addition to CUSIP because my fixed income portfolio includes some preferred stocks. In most cases I buy near enough to par that the coupon or YTM are not very different, but where the purchase cost is significantly different from par I do a YTM calculation of the coupon plus the impact of the difference between 100 and my purchase cost and bold the result so I know it isn't really the coupon.

From that data sheet I have a number of pivot tables of certain information by account, by maturity year, by yield (high to low). I also have other sheets that leverage off of the data sheet summarizing the data by maturity year with a maturity distribution graph, quality distribution, summary by issuer, and summary by type and summary of call info (callable, non-callable). Types are CD, Agency, Corporate, FF&C (full faith and credit which would be UST and I-Bonds), Preferred Stock and Money Market Funds.

I update the data sheet each month end and reconcile back to my brokerage records then do a quick review of the analyses sheets to see that the total par ties back to the data sheet. Luckily, I don't trade very much these days so if isn't hard to update once a month.

 

[Montecfo]

Accumulation here, but I know my average spend, know my savings rate, and know my desired time frame. With 6% I have little desire to take on much more equity risk so i can “get to the finish line”.

I am in that weird stage that i don’t think enough is written about. I think I can finally see the goal down the road in the distance. I cannot let my foot off the gas, but I don’t want to fly off into the ditch either. Sort of driving me crazy actually.

I remember those days. good times.

Well one thing to keep in mind is presumably you will have a long retirement ahead and will need a robust allocation to equities. If we get a chance at some debt investments meeting my parameters, great. That may be a brief but lucrative time for fixed income investors.

But we do not want to neglect the equity part. Equities are your horses to do the heavy lifting. And once the market begins to see the path to lower rates, equities are likely to rally at least for a time.

 

[COcheesehead]

When rates stop rising, the market may rise for a short period - maybe just days, but ultimately history has taught us that the effects of higher rates usually hits well down the road resulting in economic downturn. We could see equities languish for years from here.
Hope for the best, but also prepare for lean times as well.

Planning tools are your friend to determine your proper asset allocation. Everyone is different based on how much you have and how much you plan to spend.

 

[Texas Proud]

^^^ I couldn't find a suitable tool so I built my own in Excel.

The central sheet is a "data" sheet that has the following for each holding: CUSIP/Ticker, Issuer Name, Type, Coupon (YTM if bolded), Cpns/Year, Maturity Date, Call Price, Next Call, Purchase Date, Purchase Price, Par Value per unit, QTY, Purchase Cost, Par Value, Account, Moody’s Rating, S&P Rating.

On that data sheet I also compute Annual Income (par * coupon) and Maturity Year (year of the Maturity Date field which is used for maturity distribution analyses).

I include Ticker in addition to CUSIP because my fixed income portfolio includes some preferred stocks. In most cases I buy near enough to par that the coupon or YTM are not very different, but where the purchase cost is significantly different from par I do a YTM calculation of the coupon plus the impact of the difference between 100 and my purchase cost and bold the result so I know it isn't really the coupon.

From that data sheet I have a number of pivot tables of certain information by account, by maturity year, by yield (high to low). I also have other sheets that leverage off of the data sheet summarizing the data by maturity year with a maturity distribution graph, quality distribution, summary by issuer, and summary by type and summary of call info (callable, non-callable). Types are CD, Agency, Corporate, FF&C (full faith and credit which would be UST and I-Bonds), Preferred Stock and Money Market Funds.

I update the data sheet each month end and reconcile back to my brokerage records then do a quick review of the analyses sheets to see that the total par ties back to the data sheet. Luckily, I don't trade very much these days so if isn't hard to update once a month.

I have started a worksheet and am doing some of what you have...


So far my YTM seems to not work... but I have not really looked to see what I am doing wrong...


I just noticed that you can convert tickers to a cell that downloads the data... but I now have to figure out how to get the preferred as it did not get those... and nothing for the bonds...


Last... I want to grade my whole portfolio... I have to come up with a rating for the NR rated but want a whole portfolio view... I have recently bought low IG to move it up but do not know if the whole thing is up to BBB or just BB...


I am starting to look online as I would assume there is a program out there for this..

 

[nwsteve]

^^^ I couldn't find a suitable tool so I built my own in Excel.

The central sheet is a "data" sheet that has the following for each holding: CUSIP/Ticker, Issuer Name, Type, Coupon (YTM if bolded), Cpns/Year, Maturity Date, Call Price, Next Call, Purchase Date, Purchase Price, Par Value per unit, QTY, Purchase Cost, Par Value, Account, Moody’s Rating, S&P Rating.

On that data sheet I also compute Annual Income (par * coupon) and Maturity Year (year of the Maturity Date field which is used for maturity distribution analyses).

I include Ticker in addition to CUSIP because my fixed income portfolio includes some preferred stocks. In most cases I buy near enough to par that the coupon or YTM are not very different, but where the purchase cost is significantly different from par I do a YTM calculation of the coupon plus the impact of the difference between 100 and my purchase cost and bold the result so I know it isn't really the coupon.

From that data sheet I have a number of pivot tables of certain information by account, by maturity year, by yield (high to low). I also have other sheets that leverage off of the data sheet summarizing the data by maturity year with a maturity distribution graph, quality distribution, summary by issuer, and summary by type and summary of call info (callable, non-callable). Types are CD, Agency, Corporate, FF&C (full faith and credit which would be UST and I-Bonds), Preferred Stock and Money Market Funds.

I update the data sheet each month end and reconcile back to my brokerage records then do a quick review of the analyses sheets to see that the total par ties back to the data sheet. Luckily, I don't trade very much these days so if isn't hard to update once a month.

This may not apply to you but recent postings on deducting prepaid interest on secondary bond purchases looks like worthy of a column. I recently had to manually review all my 2022 bond purchases to capture the prepaid interest on purchases so I could amend 2022 fed return

 

[pb4uski]

This may not apply to you but recent postings on deducting prepaid interest on secondary bond purchases looks like worthy of a column. I recently had to manually review all my 2022 bond purchases to capture the prepaid interest on purchases so I could amend 2022 fed return

I don't see any need for that... it is effectively captured in YTM and is simply an adjustment of the first coupon that I receive for the period of time that I didn't own it. Below is an example with a 5%, 5 year bond... bought at issue or bought pat way through the first coupon period. I'm not going to sweat the 1bp difference.

	5.06%	5.05%
12/31/22	-10,000
03/31/23		-10,125
06/30/23	250	250
12/31/23	250	250
06/30/24	250	250
12/31/24	250	250
06/30/25	250	250
12/31/25	250	250
06/30/26	250	250
12/31/26	250	250
06/30/27	250	250
12/31/27	10,250	10,250

 

[pb4uski]

...Last... I want to grade my whole portfolio... I have to come up with a rating for the NR rated but want a whole portfolio view... I have recently bought low IG to move it up but do not know if the whole thing is up to BBB or just BB...


I am starting to look online as I would assume there is a program out there for this..

I am with Schwab and each CUSIP includes Moody's and S&P ratings and that is what I use.

I don't have any NR... I'm not that adventurous I guess. I do a quailty distribution and and look at cumulative percentages for A or better (high quality to me) and BBB- or better (investment grade).

Quality	Quality Distribution
FDIC	40.7%	40.7%
AAA	0.0%	40.7%
AA+	37.7%	78.4%
A+	3.9%	82.3%
A	7.7%	90.0%
A-	3.9%	93.9%
BBB+	2.6%	96.4%
BBB	2.3%	98.7%
BBB-	0.0%	98.7%
BB+	1.3%	100.0%
BB	0.0%	100.0%
BB-	0.0%	100.0%
CCC+ or lower	0.0%	100.0%
	100.0%