muni funds, yes, of course, but i'm wondering what else might fit the bill, at least to some degree. i hold funds like RSIVX and CBLDX in my IRA but the possible tax consequences make me leery of holding them elsewhere. so far, i've only been able to come up with the CLO-bank-loan etf JAAA, which has a M* 3-year tax-cost ratio of 1.37, along w/ a very appealing standard deviation of under 2. First, what do you all think of that ETF? Second, what do you think of it in a taxable account? And lastly do you see any better alternative with equally low SD?
Returns-wise, it looks steadier even than RSIVX and CBLDX, which ain't no mean feat, even though who knows what the future may bring, etc etc and so forth.
https://stockcharts.com/freecharts/perf.php?JAAA,RSIVX,CBLDX&n=265&O=011000
Comments
Since we have so much money in CDs, Treasuries and short term bonds, I’m taking a little more risk with several moderately conservative allocation funds — namely FMSDX, PRFCX and TAIFX. As long as the yields on CDs and Treasuries remain fairly high, I will probably keep my ladder going as issues mature. I prefer Treasuries over CDs when the yields are comparable because they are more tax efficient and easier to sell if needed.
MY ST mix at Fido and elsewhere is T-Bills (no longer rolled at maturity), m-mkt funds, FCNVX, USFR, ICSH, muni VMLUX.
Barron's shows 5.3% yield, Stock Rover shows 5.9% yield. Either way, it's hefty, and I'll take it. Not so juicy as TUHYX (7.39%) nor PRCPX (6.86%). I'm hanging onto those, too.
Bonds of all sorts in the portfolio = 37% right now.
CBLDX + RSIVX/RSIIX are good options with lower volatility and both yields are higher than most at 8+% and 9+%.
Usually, risk-adjusted performance is the most important, at least for me. That means performance + risk/volatility.
Just because a fund pays 6,7, or whatever %, doesn't make it a good choice, you want both.
Usually, higher yield = lower-rating bonds. This is why CBLDX+RSIIX are good choices, they have all 3. High income, good performance, excellent volatility. Not many funds have it.
Is it a guarantee that RSIVX would make more money than TUHYX? no, nothing is a guarantee, but there is a good chance it RSIVX would be less volatile.
Some people don't care. Investors have different goals.
Right now I know of 3-4 bond funds with excellent performance and the price hardly goes down in the last several months.
In 2021 JAAA was the worst.
In 2022, a unique crazy year, CBLDX+JAAA did better than RSIVX
Since 2023, JAAA has the best risk/reward.
But, in the last 1-3 months RSIVX leads.
Approach the above or not using your own style.
YTD is what counts now. My "gamble" right now is on funds with low SD + bigger yield, think 8+%, and excellent performance YTD.
There are 4 funds on my short list, I own 2.
https://schrts.co/TeIaWmPu
Definitely not PIMIX and its higher SD and lower yield. I used to own PIMIX at 50+% for years until 01/2018. The magic has been gone since then. For investors who hold, I prefer RCTIX.
Long article that confirms my
biasopinion at the link.It has been my hunch through all of this that Powell has no desire to be remembered in the same breath with Arthur Burns. Powell and Burns might agree on one thing though:
Maybe it's time for other parts of the system to step up and see what they can do about these issues that people think can only be solved by lending money for free.
If Jane and Joe Uber driver can't afford health insurance, or a mortgage, I think Joe and Jane would be better off with a strong union than a Fed policy making it easier for gig and health care companies to borrow money,
I own funds that have done well lately.
BTW, the Fed controls the short term rate, but markets control the longer term.
The 10 year may be at 3.5-4% for the next 6 months and that's not a big decrease.
BTW, completely agree with you, the experts are guessing like anyone else and it's all about who can put on a coat and a tie and articulate the best narrative.
Probably best to just ignore them, set your allocation where you can sleep at night, diversify between some bonds, cash, gold, stocks and go live your life,be nice to people.
Will say tom Lee with fundstrat has been the only tea leaf reader who's been correct for a while but the house is falling types get more clicks. The guy taggert. Who has interesting guests on his podcasts has been way wrong for love you long time it's almost comical. Pure noise and waste of time under the guise of educating people on investing
Good luck and good health to all
Baseball fan
Its my sense this fed has succeeded in establishing its inflation fighting credentials. And, the feds goal is to achieve both maximum employment and price stability and to thereby keep the economy growing. There are fairly strong signs the inflation rate may be sustainably trending downward after experiencing a strong spike caused by supply/demand imbalances during the the pandemic. The aggregate supply and demand of workers is also moving towards a balance point. With a sustainable path to achieving the price stability coming into view, it is reasonable for the fed to start shifting more of its focus to reducing the strains and imbalances caused by the interest rate spike (including those noted above). Doing that will help it continue to achieve the maximum employment part of its mandate. Waiting longer than necessary increases the risk of unnecessarily weakening the economy and of increasing the unemployment rate. Will it take 3, 6, 12, or 24 months worth of additional favorable data to provide the fed enough time to confirm that reducing the fed funds rate is prudent? My expectation is that 6 months or less will be enough. But, I am not yet making any significant investment decisions based on that expectation. (What was once the bond sleeve of my portfolio was renamed to be the ballast sleeve several years ago.)
You can also see what I think of many experts over the years, including Tom Lee (link).
Baseball fan