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The Closing Bell: Stocks Close Broadly Lower Friday, Down For Week
I'm amused the board spent days or weeks fretting about Cyprus a year ago - but hardly a mention of Ukraine & Crimea which will prove to have much longer lasting effects on global stability.
As the board and radio/tv news, is generally equity-centric reporting, I'll lend a helping hand to the bond side of life with the below link. Regards, Catch
Good to see that you have started to post again. I really do miss some of those post you use to make about your bond funds and your thinking. I feel I have a good read on the markets in general (both stocks & bonds) but I feel you have the better take on bonds over me as that seemed to be your specality.
I too, follow the same link that you provided above to get my information on bonds.
I hold three good short term bond bunds (ITAAX, LALDX & THIFX) and three really good multisector income funds (LBNDX, NEFZX & TSIAX) in my income sleeve within my portfolio. My question. Would you swap the short duration funds into something else perhaps believeing that interest rates are headed upward sometime in the future and deal with it when this happens or would you just sit tight with the way it currently is configured? And, if you were to swap the short duration for longer duration funds how far out would you go? After all, the moose recently made a call to long term treasuries and that seems to have been a productive call, thus far. I am not sure how much more there is left to the upside in this move but it has worked in a positive way.
His strategy is only a one position strategy which he positions accordingly based upon his read on the markets. If you were to run a one position strategy where would you currently position it? I know, that is a tough question. But, give it some thought if you would.
Thanks in advance Catch for taking the time to read and perhaps resond to my questions.
Your post although not directed to me was good information. But, not exactly the information I was looking for.
I myself have favored stocks over bonds through the years and my stock allocation has always been greater than my allocation to bonds within my portfolio. My question was to Catch as how he might better configure the income sleeve of my portfolio. You or anyone else are welcome to commet on this.
Howdy, I took a quick look at one of the short term bond funds, ITAAX, in your list. I am not familiar with this fund or its prospectus, as to what methods are available to the managers; but find that the most current report (12-31-13) indicates about 35% of the bond holdings are long term, with duration between 10 and 30 years. I note this, as apparently the manager(s) have some amount of wiggle room. I would consider ITAAX a flexible short term bond based upon the holdings. Of course, not unlike many active managed bond funds, the wiggle room allowed, may be of value, if the managers get things right about the direction of interest rates.
You asked: " My question. Would you swap the short duration funds into something else perhaps believeing that interest rates are headed upward sometime in the future and deal with it when this happens or would you just sit tight with the way it currently is configured? And, if you were to swap the short duration for longer duration funds how far out would you go?"
>>>We seldom use short term bond funds; and when used, we consider these as "cash" accounts for use to park monies from something that has been sold. 'Course, the consideration (an example) is that if we sell an equity fund that is beginning to move, too far, in the wrong direction; the monies "could" go into a short term fund to park the money for a future purchase, of whatever. In this example, I suppose the main thought is why one chooses to use a short term bond fund. More often than not, when we sell an equity position(s), the monies would more likely move into a multi-sector bond fund, versus short term dedicated.
As to interest rates. Well, we surely don't know; but until I believe there is more strength in the economy(s) that would put pressure on rates moving upward, our house is comfortable with multi-sector bond funds, in particular; and let the managers make the choices. Our current largest holdings are: LSBDX, PIMIX, FRIFX (about 1/2 bonds), OPBYX, DGCIX, FAGIX and 5 other high yield bond funds. Begining around Feb. 24 we reduced our equity percentage to about 15%, with the remainder in bond funds....no money market/cash holdings. Our current equity holdings are: PRHSX, VSCPX, GPROX and some equity inside of FAGIX, LSBDX and FRIFX.
Lastly, per your question: "And, if you were to swap the short duration for longer duration funds how far out would you go?"
>>>I would personally prefer a multi-sector bond fund to let the managers decide about duration, and the type of bonds used in the mix. We have held funds in the past dedicated to the long end of bonds (20+ years). We are not as comfortable with such a position today.
A kinda summary for our actions since the end of February, is that the large 2013 equity run needed to have a break and that some bond sectors were oversold in 2013. I also feel that pension funds (lotta monies) have and may still be restocking their holdings of bonds.
If equity runs higher again, in the near term; we likely will be caught with our investment pants down !!!
Time to get back to the house remodel project.
Take care down there, and hoping the nasty spring weather is not causing problems for you and yours.
Comments
I'm amused the board spent days or weeks fretting about Cyprus a year ago - but hardly a mention of Ukraine & Crimea which will prove to have much longer lasting effects on global stability.
FWIW
Regards,
Catch
Bonds, weekending 4-25-14
@hank. Good point about Cyprus. Seems like distant memory. Let's hope Ukraine intervention fades quickly too.
Good to see that you have started to post again. I really do miss some of those post you use to make about your bond funds and your thinking. I feel I have a good read on the markets in general (both stocks & bonds) but I feel you have the better take on bonds over me as that seemed to be your specality.
I too, follow the same link that you provided above to get my information on bonds.
I hold three good short term bond bunds (ITAAX, LALDX & THIFX) and three really good multisector income funds (LBNDX, NEFZX & TSIAX) in my income sleeve within my portfolio. My question. Would you swap the short duration funds into something else perhaps believeing that interest rates are headed upward sometime in the future and deal with it when this happens or would you just sit tight with the way it currently is configured? And, if you were to swap the short duration for longer duration funds how far out would you go? After all, the moose recently made a call to long term treasuries and that seems to have been a productive call, thus far. I am not sure how much more there is left to the upside in this move but it has worked in a positive way.
His strategy is only a one position strategy which he positions accordingly based upon his read on the markets. If you were to run a one position strategy where would you currently position it? I know, that is a tough question. But, give it some thought if you would.
Thanks in advance Catch for taking the time to read and perhaps resond to my questions.
Cordially,
Old_Skeet
I've been having fun watching the results of WBMIX versus RGHVX which I hold. It's like a horse race with Gargoyle up by a length - year to date
Regards,
Ted
http://bonds.about.com/od/bondinvestingstrategies/a/Stocks-And-Bonds-Year-By-Year-Total-Return-Performance.htm
Thanks for the summary of Stocks vs. Bonds.
Your post although not directed to me was good information. But, not exactly the information I was looking for.
I myself have favored stocks over bonds through the years and my stock allocation has always been greater than my allocation to bonds within my portfolio. My question was to Catch as how he might better configure the income sleeve of my portfolio. You or anyone else are welcome to commet on this.
Old_Skeet
Howdy,
I took a quick look at one of the short term bond funds, ITAAX, in your list. I am not familiar with this fund or its prospectus, as to what methods are available to the managers; but find that the most current report (12-31-13) indicates about 35% of the bond holdings are long term, with duration between 10 and 30 years. I note this, as apparently the manager(s) have some amount of wiggle room. I would consider ITAAX a flexible short term bond based upon the holdings.
Of course, not unlike many active managed bond funds, the wiggle room allowed, may be of value, if the managers get things right about the direction of interest rates.
As an example, Fidelity's FSHBX, per the current report, is indeed a short term bond fund. FSHBX internal composition view
You asked: " My question. Would you swap the short duration funds into something else perhaps believeing that interest rates are headed upward sometime in the future and deal with it when this happens or would you just sit tight with the way it currently is configured? And, if you were to swap the short duration for longer duration funds how far out would you go?"
>>>We seldom use short term bond funds; and when used, we consider these as "cash" accounts for use to park monies from something that has been sold. 'Course, the consideration (an example) is that if we sell an equity fund that is beginning to move, too far, in the wrong direction; the monies "could" go into a short term fund to park the money for a future purchase, of whatever.
In this example, I suppose the main thought is why one chooses to use a short term bond fund. More often than not, when we sell an equity position(s), the monies would more likely move into a multi-sector bond fund, versus short term dedicated.
As to interest rates. Well, we surely don't know; but until I believe there is more strength in the economy(s) that would put pressure on rates moving upward, our house is comfortable with multi-sector bond funds, in particular; and let the managers make the choices. Our current largest holdings are: LSBDX, PIMIX, FRIFX (about 1/2 bonds), OPBYX, DGCIX, FAGIX and 5 other high yield bond funds. Begining around Feb. 24 we reduced our equity percentage to about 15%, with the remainder in bond funds....no money market/cash holdings. Our current equity holdings are: PRHSX, VSCPX, GPROX and some equity inside of FAGIX, LSBDX and FRIFX.
Lastly, per your question: "And, if you were to swap the short duration for longer duration funds how far out would you go?"
>>>I would personally prefer a multi-sector bond fund to let the managers decide about duration, and the type of bonds used in the mix. We have held funds in the past dedicated to the long end of bonds (20+ years). We are not as comfortable with such a position today.
A kinda summary for our actions since the end of February, is that the large 2013 equity run needed to have a break and that some bond sectors were oversold in 2013. I also feel that pension funds (lotta monies) have and may still be restocking their holdings of bonds.
If equity runs higher again, in the near term; we likely will be caught with our investment pants down !!!
Time to get back to the house remodel project.
Take care down there, and hoping the nasty spring weather is not causing problems for you and yours.
Regards,
Catch
I appreciate your comments and thoughts. I am not sure what I'll do ... but, I am in the think it over process.
Thanks again for taking time to comment.
Old_Skeet