Fixed Income Investing II

[karel]

Might have to look at this... My SPLP-A has a huge gain so the current yield is not that attractive and I have been looking for something to move it too... it also matures in a few years so going out a bit looks promising...

I also own SPLP-A. At $23.00, I estimate Yield to Maturity of about 10.2%, including both the coupon and the additional $2 of accretion. At $23.25 its about 9.6%. That's still a very juicy yield. At these prices, I'm holding till maturity.

 

[COcheesehead]

So true, my first full time job after school in the early 70's yielded me about 12k yr (gross). (IIRC). Easily make that much per month these days just in fixed income returns.

Crazy, isn’t it?

 

[COcheesehead]

7% now reached for an agency bond. Call window starts late January.
3130AXGD4

 

[Koolau]

Updated through today, my fixed income generates more per month right now than I earned for an entire year at my first real job out of college, the cost of my first three new cars combined or about 25% of the cost of my first house. I don’t know whether to cry or be happy. It shows what inflation will do over almost 38 years and just how high yields are right now.

My first (only) "professional" j*b started in 1969. I was making $4.50/hour and thought I was rich. Now, on average, my port. makes more than $4.50/hour - and that's 24/7/365! Inflation is a real killer.

 

[COcheesehead]

My first (only) "professional" j*b started in 1969. I was making $4.50/hour and thought I was rich. Now, on average, my port. makes more than $4.50/hour - and that's 24/7/365! Inflation is a real killer.

Ok you made me do it - figure out the yield per hour. $26.73/ hour for a 24 hour day, 30 day month.

 

[Koolau]

Ok you made me do it - figure out the yield per hour. $26.73/ hour for a 24 hour day, 30 day month.

I feel better already.

 

[pb4uski]

Ok you made me do it - figure out the yield per hour. $26.73/ hour for a 24 hour day, 30 day month.

Do you need an heir?

 

[COcheesehead]

Do you need an heir?

It’s now almost like a game to me and I know it is for you too. To add another $50 or $100 per month, it just all adds up. These days will go away someday. Make hay while the sun shines.

 

[Koolau]

It’s now almost like a game to me and I know it is for you too. To add another $50 or $100 per month, it just all adds up. These days will go away someday. Make hay while the sun shines.

Said another way, "enjoy it while it lasts." Tougher times lay ahead if we should live so long.

 

[Spock]

Fidelity's bond search tool is having a bad day today.
I put in all the search filters (min coupon, maturity range, call after date X, etc.) to whittle the pool down to (for example) "See 522 CUSIPs"... click on the show me button and get an admonishing pop-up that "your search returned 12,096 bonds. limit is 3000. please narrow your search..."

 

[Mulligan]

Fidelity's bond search tool is having a bad day today.
I put in all the search filters (min coupon, maturity range, call after date X, etc.) to whittle the pool down to (for example) "See 522 CUSIPs"... click on the show me button and get an admonishing pop-up that "your search returned 12,096 bonds. limit is 3000. please narrow your search..."

The bond market is closed today. Maybe that has something to do with it.

 

[Spock]

The bond market is closed today. Maybe that has something to do with it.

Maybe. But the market is closed every weekend and the tool still works(ed).
Maybe todays "flight to quality" in the markets that are still open in the rest of the world and giving Fido's software a curveball. Who knows. Software isn't that hard.

 

[pb4uski]

The bond market is closed today. Maybe that has something to do with it.

Yup.

I forgot the market was closed today and figured it out when I went to request a bid. I was able to transfer securities between accounts and that happened straight away as usual.

 

[pb4uski]

Maybe. But the market is closed every weekend and the tool still works(ed).
Maybe todays "flight to quality" in the markets that are still open in the rest of the world and giving Fido's software a curveball. Who knows. Software isn't that hard.

Why don't you call Fidelity and ask them?

 

[Spock]

Why don't you call Fidelity and ask them?

I don't care why it's broken. I just want it to work so I can have a shopping list built for when the markets open.
I did on-line chat with Fidelity's tech support and walked the unlucky soul having to work on a non-trading day through the steps to recreate the problem. Once they were able to recreate it they reported it to Fidelity's web support. Good enough for you?

 

[Koolau]

I don't care why it's broken. I just want it to work so I can have a shopping list built for when the markets open.
I did on-line chat with Fidelity's tech support and walked the unlucky soul having to work on a non-trading day through the steps to recreate the problem. Once they were able to recreate it they reported it to Fidelity's web support. Good enough for you?

Sounds like you did your part! Good for you. Most of us would just complain.

 

[imbatman]

Ha ha this exchange was amusing and familiar. I know it is likely just a generational / personality thing but I always have unintentional reflexive irritation when people/ companies (adios Merrill) expect me to call to solve a problem. I don't feel like stopping everything I am doing (still employed, often already on large group calls) to focus on placing a phone call and navigating an intentionally labyrinthian IVR system, provide all my sensitive info to some rando, just to find out (often) they don't know what is going on either. I want to multitask with a quick chat, a secure message.....if you can operate a website, you can provide those things. I have had good luck with around 24-hour replies to secure messages and generally decent chats on Fido, I only call if I need something important within a few hours or less. Glad to have the bond markets back open today

 

[Spock]

Just an observation.
For a while now I've noticed secondary market bonds (at least the ones in my set of filters: credit rating, maturity date range, callable after X) come in a couple of types of waves. One day the wave will be a longish list of issues all from the same issuer. Another wave will be when a lot of the listings are all in the same industry.
This morning my list is full of utilities/energy: Southern Cailf Gas, Duke Energy, Florida Power.
An an unusual combo that I think are both owned by Berkshire Hathaway: MidAmerican Energy and Burlington Northern.
Every time I see a trend like this I always wonder what bit of news or other trigger resulted in this.
Anyway... while just a curiosity seeing a relative flood of issues from the same issuer/industry always makes me hesitate wondering what does the seller(s) know that I don't.

 

[Fermion]

My little experiment with TIPS isn't going so well.

I bought $25,000 in a HSA with a 1.125 coupon, 2033 mature date and they are down 10%.

 

[Montecfo]

My little experiment with TIPS isn't going so well.



I bought $25,000 in a HSA with a 1.125 coupon, 2033 mature date and they are down 10%.

TIPS are highly volatile due in part to low coupon rate.

But this underscores that duration is the enemy in a rising rare environment, not the investment vehicle (e.g. bond funds as some have suggested).

 

[Fermion]

TIPS are highly volatile due in part to low coupon rate.

But this underscores that duration is the enemy in a rising rare environment, not the investment vehicle (e.g. bond funds as some have suggested).

I just want the HSA to keep up with medical inflation.

 

[Spock]

I just want the HSA to keep up with medical inflation.

Medical inflation is a whole different animal in the concocted CPI numbers used to adjust TIPS. The healthcare component of CPI could go through the roof but if synthetic numbers like Owners Equivalent Rent of Residences, seasonal adjustments, and whatever else is that goes into calculating todays CPI (which is very different than the CPI used to track inflation in the 70's) is down you could end up with 0 overall inflation with an exploding health care budget.

 

[Healthy Lifestyle]

My little experiment with TIPS isn't going so well.

I bought $25,000 in a HSA with a 1.125 coupon, 2033 mature date and they are down 10%.

I never had an interest in TIPS until now that I am retired, but your post confirms that I need to take a TIPs 101 class, so I do not buy them.

 

[pb4uski]

My little experiment with TIPS isn't going so well.

I bought $25,000 in a HSA with a 1.125 coupon, 2033 mature date and they are down 10%.

But if you plan to hold the TIP until maturity in 2033 then the 10% loss do to changes in interest rates shouldn't matter... you are effectively a HTM investor and should ignore fair value. (Hard to do though).

 

[Popeye]

Ha ha this exchange was amusing and familiar. I know it is likely just a generational / personality thing but I always have unintentional reflexive irritation when people/ companies (adios Merrill) expect me to call to solve a problem. I don't feel like stopping everything I am doing (still employed, often already on large group calls) to focus on placing a phone call and navigating an intentionally labyrinthian IVR system, provide all my sensitive info to some rando, just to find out (often) they don't know what is going on either. I want to multitask with a quick chat, a secure message.....if you can operate a website, you can provide those things. I have had good luck with around 24-hour replies to secure messages and generally decent chats on Fido, I only call if I need something important within a few hours or less. Glad to have the bond markets back open today

Every time I have an issue that is complex enough to make me call, the guy who answers doesn’t know either. Lol! After 5-10 minutes of blah blah blah they give me another number to call during regular hours.