We are entering a "Golden Period" for fixed income investing

[Mulligan]

You have to wonder how often funds are getting stiffed on coupon payments. Some funds have almost 10,000 holdings and in the sleazy world of Wall Street with employees acting as auditors glued to their smartphones not their work, there has to be a lot of misappropriation of coupon/dividend payments. I had a case where DTC shorted the coupon payment by 8% which prompted an investigation by the issuer and then the SEC and the problem was resolved. The investigation cited a clerical error. However, I wondered why the same clerical error did not occur for the ten prior payments. An individual investor can keep track of their coupon and dividend payments, I wonder if all funds do? Given that funds lose so much "other peoples money", do they even care?

Freedom, I stumbled upon it…Piss on them. If you ever have a problem let ‘em have it. DTC Hotline number… 888-382-2721 option #4. Tell ‘em I said hi!

 

[Freedom56]

Freedom, I stumbled upon it…Piss on them. If you ever have a problem let ‘em have it. DTC Hotline number… 888-382-2721 option #4. Tell ‘em I said hi!

Should I tell them Mulligan says hi?

 

[Mulligan]

Should I tell them Mulligan says hi?

Yes, and also tell them you dont want to hear any weak excuses. You want accountability. Remind them if you found their phone number, you can find their office too, ha.

 

[aja8888]

Yes, and also tell them you dont want to hear any weak excuses. You want accountability. Remind them if you found their phone number, you can find their office too, ha.

He should also tell them that unless he gets satisfaction, he will post that restricted phone number on Facebook!

 

[jldavid47]

FYI, the next 52 week T-Bill auction is on Thursday 9/8. If rates hold where they were today, the yield should be about 3.5%.

 

[Dash man]

FYI, the next 52 week T-Bill auction is on Thursday 9/8. If rates hold where they were today, the yield should be about 3.5%.

Wrong!
The auction is Tuesday, September 6.

The Issue date is Thursday September 8.

 

[Billy C]

I don't buy stock index funds and would never even consider buying them.

Terrible advice.

Hopefully those who plan to retire early are smart enough to ignore it and instead read one of John Bogle’s excellent books. Doing so could change their life and allow them to achieve financial independence.

 

[aja8888]

Terrible advice.

Hopefully those who plan to retire early are smart enough to ignore it and instead read one of John Bogle’s excellent books. Doing so could change their life and allow them to achieve financial independence.

He's not giving advice, he is just stating what he does.

 

[jazz4cash]

He's not giving advice, he is just stating what he does.

+1

 

[COcheesehead]

He's not giving advice, he is just stating what he does.

+2

 

[daylatedollarshort]

Terrible advice.

Hopefully those who plan to retire early are smart enough to ignore it and instead read one of John Bogle’s excellent books. Doing so could change their life and allow them to achieve financial independence.

Those of us already retired, and many who are not, in this forum are financially independent and not everyone buys index funds. Maybe try reading some other books to see how that is possible.

 

[Freedom56]

Terrible advice.

Hopefully those who plan to retire early are smart enough to ignore it and instead read one of John Bogle’s excellent books. Doing so could change their life and allow them to achieve financial independence.

No I chose to make my own financial decisions after experiencing how much damage crooked brokers can do to your investments early in my career and retired early with an 8 figure fixed income portfolio that continues to grow. Investing for me is very simple. Invest in the highest yielding product that preserves my capital and keep compounding. With rates rising, and compounding, in a few years my annual interest income will exceed 7 figures. I could never had achieved that had I invested in money losing bond funds like BND which is about to see the next leg down as their distribution yields are lower than 30 day treasuries. Thank god I stayed away from Bogle's cult who are about to understand the meaning of a collapsing super bubble. Keep reading your John Bogle books and invest in equities which are based on the greater fool theory. Index funds have little meaning when they are dominated by a few trillion dollar market cap stocks that are collapsing one by one. Many of us have seen this movie before back in 2000. This time will be no different and this super bubble will take several years to unwind.

 

[JoeWras]

Can we stop with the cult word? That's no longer "stating what he does."

 

[Golden sunsets]

Anything held is IRAs is not subject to any Canadian tax withholdings per the tax treaty with Canada.

Thanks Freedom. I have another bond question for you. We have purchased a number of target date maturity bond funds from Guggenheim/Invesco/Ishares to match RMD withdrawal estimates. Our reasoning has been that we are spreading risk while guaranteeing payout at par. We have no intention of selling them before maturity. They of course have suffered of late along with traditional bond funds. Other than poor returns in the final year before their December maturity, as more of the fund sits uninvested awaiting payout, is there any reason they should not recover in value as maturity comes closer?


Sent from my SM-T510 using Early Retirement Forum mobile app

 

[ShokWaveRider]

Terrible advice.

Regarding not buying stock index funds. Probably true for most, but not us.

We have NEVER owned a stock or mutual fund for the over 35 years we have been in the USA, and retired very comfortably when I was 49, DW was 44 and we went sailing for 3 seasons. 10 Year High interest CDs and Our Southern California home being paid for did help I must admit.

DW did go back to work for a while in a job she liked at the local health department when we settled in NE. Fla., which was basically like volunteering. They did offer her health care though which was a great bonus and helped us immensely. I also did some odd consulting work at my leisure for my previous company as they kept bugging me when we returned from the Caribbean.

DW retired a second time when ACA came available for us both, I stopped flying around to Gigs at about the same time.

We are not rich by any means but did make some good long Term CD decisions with our capital, but no Mutual Funds or stocks.

We are proof one can do it without the stock market and just fixed investments. Some time ago I did do a calculation and we averaged about 5% a year over time on our Fixed Term investments. That did go down to about 4% in the most recent years, but our NW continued to rise if but modestly.

 

[Freedom56]

My FIL lives on rental income from all his apartment units. He has 94 units and all but two are paid off. His portfolio of apartments is worth a fortune today. He and my MIL are 87 and living very comfortably. They have a full staff at home to take care of them (governess, chef and driver, and a cleaning service). While interest rates were falling, rents were climbing along with real estate prices. He is an example of many people I know who have never invested in stocks or bonds and have become extremely wealthy. Those that think investing in index funds is only the path to financial independence are horribly misguided.

 

[Freedom56]

Thanks Freedom. I have another bond question for you. We have purchased a number of target date maturity bond funds from Guggenheim/Invesco/Ishares to match RMD withdrawal estimates. Our reasoning has been that we are spreading risk while guaranteeing payout at par. We have no intention of selling them before maturity. They of course have suffered of late along with traditional bond funds. Other than poor returns in the final year before their December maturity, as more of the fund sits uninvested awaiting payout, is there any reason they should not recover in value as maturity comes closer?


Sent from my SM-T510 using Early Retirement Forum mobile app

If they are closed bond funds with a static portfolio from inception and with a definite expiration and liquidation date at maturity, they should recover to par minus management expenses for the duration of the term.

 

[Chuckanut]

We are entering a "Golden Period" for fixed income investing

Can we stop with the cult word? That's no longer "stating what he does."

+1

Name calling and insults always raise my level of concern. People in the know can disagree and let their reasoning and facts make a powerful argument for their position.

The other warning sign for me is the raising of ‘straw man’ arguments. We see a lot of that all over the internet

 

[Dash man]

+1

Name calling and insults always raise my level of concern. People in the know can disagree and let their reasoning and facts make a powerful argument for their position.

+1
Too much labeling going on in the world. Let’s keep it off this forum.

 

[audreyh1]

I've seen this on brokered CDs before, where they couldn't be purchased by Texas residents. Has something to do with what are called "Blue Sky Laws."

Investopedia -- Blue Sky Laws

Right, I see offerings even on brokered CDs that I can’t purchase as a TX resident due to Blue Sky laws.

 

[daylatedollarshort]

+1
Too much labeling going on in the world. Let’s keep it off this forum.

I hope that applies to those who continually make snide comments about "market timers", even in the active investing forum, as well. Or those who make "terrible advice" blanket comments about not buying index funds in a thread focused on buying individual bonds.

ETA: One of the definitions of a cult is "devoted attachment to, or extravagant admiration for, a person, principle, or lifestyle." Is that an insult or an accurate description of a poster telling everyone else on a forum that there is only one good investing style and it is described in the books by one particular person? [FONT=&quot]
[/FONT]

 

[Freedom56]

Okay let's focus on individual fixed income only here:

CDs
Corporate Bonds/notes
Treasury bills/notes/bonds
Agency notes/bonds
Investment grade preferred stocks
exchange traded debt

Bond fund holders can start their own thread along with equity index fund investors.

We are approaching tax loss selling season. If 2013 and 2018 are a guide, we can expect some brutal selling. Those are the times you want to buy. Investment grade preferred stocks are always candidates for fund selling in November and December. A significant portion of preferred stock holdings are concentrated in two funds PFF and PGX. When these two funds sell-off, individual preferred stocks can drop as much as 45% fairly quickly and then rise back up swiftly as their yields become too attractive to individual investors. March 2020 saw some incredible returns for preferred stock buyers over a fairly short timeframe of about 6-8 months. Keep some dry powder ready for this to unfold later in the year. The best quality preferred stocks are from the money center banks (JP Morgan, Wells Fargo, Bank of America, Citigroup, Capital One Financial).

 

[ShokWaveRider]

Okay let's focus on individual fixed income only here:

CDs
Corporate Bonds/notes
Treasury bills/notes/bonds
Agency notes/bonds
Investment grade preferred stocks
exchange traded debt

You could add MYGAs to this list. (Insurance equivalent of a CD with tax deferral)

 

[Freedom56]

You could add MYGAs to this list. (Insurance equivalent of a CD with tax deferral)

Aren't there already threads dedicated to MYGAs?

 

[pletal]

You could add MYGAs to this list. (Insurance equivalent of a CD with tax deferral)

You took the words right out of my mouth. Quote from the singer Meatloaf.