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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • New Report: All Stock Portfolio Beats Stock and Bond Mix Over Time (Originally From Bloomberg)
    I think I have mentioned in some thread at MFO. Dave Ramsey said recently that withdrawing 8% with COLA was OK with all-stock portfolios and that everyone recommending only 4-5% with COLA from hybrids was a fool.
    Well, tables were turned soon on Ramsey as many on Twitter showed that with Ramsey's advice, anyone who started in 01/2000 would have already run out of money by now, forget about 30-40 years. So, fool was Ramsey. He didn't offer a rebuttal.
    Decumulation is very different and less forgiving than accumulation.
    yogibearbull yogibearbull in Other Investing
  • New Report: All Stock Portfolio Beats Stock and Bond Mix Over Time (Originally From Bloomberg)
    +1 Thank you @Roy / Excellent link.
    On occasion I listened to Ramsey 20+ years ago when he was on late night AM. Sounded much more rational than. From that included clip, it sounds like he’s been attending the ”Rush Limbaugh School of Public Address”. Make what you will of his math.
    FWIW - About 15 years ago (possibly more) there was a thread (maybe on F/A?) discussing a published theory that retirees should start out conservatively positioned and become more aggressive as they age. Sounded ridiculous to me at the time. But 25+ years into retirement I can at least understand the logic. Early on you’re most concerned about outliving your assets. If you’re fortunate enough, later on that becomes a less important concern and you might be inclined to put a little more risk “on the table” in pursuit of greater reward.
    As always: No 1 size fits all.
    hank in Other Investing
  • New Report: All Stock Portfolio Beats Stock and Bond Mix Over Time (Originally From Bloomberg)
    @yogibearbull
    That's what concerns me for a good friend who is 50 years old (married) and has a retirement portfolio of a million already. He hopes to retire at 52 and is planning to be 100% invested in the SP500 until death. He scoffs at the 4% rule as being far too conservative, though I don't know what his starting withdrawal rate plan is. He has floated the idea of meeting with a financial planner to vet his plan.
    Here is a link for an article from M* columnist John Reckenthaler on the viability of an all-stock portfolio and high real withdrawal rate in retirement.
    https://www.morningstar.com/retirement/can-you-safely-spend-more-early-retirement
    Roy in Other Investing
  • Wealthtrack - Weekly Investment Show
    Dec 9th Episode:
    -Next week's guest David Giroux
    Ed Hyman’s insights peaks as he’s consistently ranked Wall Street’s top economist for 43 years. Last year, he tracked the Federal Reserve’s tightening policies, predicting a slowdown in inflation and warning of a potential recession if credit conditions tightened further.

    bee bee in Fund Discussions
  • Brokered CD at Schwab six days late paying semi annual interest payment
    Anyone else have this experience?
    ========================
    Yes, I did one time, but at Fido not Schwab. It too was with a very large bank. It was in Jan 2023 and I discussed it in a thread on the Fido Investor Community board titled, "FDIC'd Brokerage CD - Late Interest Payment."
    In case you don't have access to it (Invitees Only), here are some excerpted comments from that thread. All comments are mine except the one as noted. I bolded some of the most important points from that thread.
    Summarily,
    I have owned a CD ladder for 15 years with LOTS of CDs and a late interest payment issue has only ever happened ONCE. (Pretty remarkable!)
    I spoke to very helpful FI guys at Fido a few times during the resolution of the issue and got great insights to it and help resolving it.
    I also contacted the bank directly and spoke to a high level manger there who was extremely helpful and concerned.
    The cause of the error was a system error on the bank's side after a recent merger.
    I received my accurate interest payment 10 days after the scheduled interest payment date and have not had any issues since with this CD or the numerous others we own.
    =========================
    (From that thread's OP:)
    The bank on one of our CDs did not pay interest on the scheduled payment date. In conversations with Fido reps we've been told a couple of things:
    (1) The interest payment is not yet overdue. It becomes overdue (mid-week, this week) at 10 days past the scheduled interest payment date.

    (2) The bank has made its timely interest payments on all other CDs issued by it through Fido brokerage.
    (3) Generally, if banks are untimely on their interest payments, it usually occurs at the beginning of calendar years, as is the case with this one.
    (4) If not received by the overdue date, Fido initiates a "service request" at the request of the account holder and contacts the bank to inquire about the late payment and determine if/when it will be received by Fido.
    (5) If there are unresolved issues with either the interest payment or the principal, the contract is between the account holder and the bank and any resolution of interest not received, or default on the principal payment, is between the account holder, the bank, and perhaps ultimately FDIC.
    ======================================
    Per the ever helpful and resourceful yogibearbull:
    Hopefully this situation is resolved quickly and satisfactorily.
    But Fido is only a broker/middleman here and can/will do courtesy follow ups.
    As the matter is between the CD holder and the issuing institution, it may not hurt to file a delayed-interest report to the FDIC.
    https://ask.fdic.gov/fdicinformationandsupportcenter/s/?language=en_US
    https://www.fdic.gov/contact/
    ========================================
    UPDATE per Fido:
    Fido is encountering a number of these situations with several banks at this point in time. A "service request" will be made tomorrow on the overdue date IF the interest payment has not been received by then.
    Fido assures that rarely has an account holder had to resort to individually filing a FDIC claim and does not at all expect that will happen here. The likely cause of the delayed payment is a system issue of the bank that merged with another bank in 2022.
    Interest payments can be put on hold for a month or even as long as a quarter.

    ========================================
    The Fido FI Rep I did speak to today stated what other reps have told me: A couple banks have not made their January interest payments due to either (1) system issues on the bank's end or (2) the normal, EOY/BOY delays.
    I did also speak directly to a person at the bank who confirmed that this was in fact a system issue on their end that caused the interest payment to be made 10 days after the normal interest payment date.
    stillers stillers in Other Investing
  • High yield long term CDs

    OK, so since I can't say I will never withdraw from a brokerage CD, I will transfer them from the 401k to a Bank IRA.
    Nothing against your advisor, and this may well have been discussed, but if it was not... This point is a cornerstone of CD ownership that a client should have learned in even ONE fee-based hour.
    EDIT: I've bought plenty of Secondary Issue CP CDs for Discounts. I hope to never be in a position to have to TRY to sell one, unless of course for a Premium!
    I will make sure all CD are call protected
    CP is a CD ladder holders friend.
    I don't quite understand the 3 month to 1 year rates holding up better and building the far end of the ladder. With the info I've given can you show me how that would look?
    All comments here are about brokerage, CP CDs. Bank CP CD data may/will vary.
    Up to one year rates are not very far down from their respective peaks and still at/above 5%. To wit, 3-month rates peaked around 5.50% and are still at 5.35%. On the far end, 5-yr rates peaked around 5.05% but are now DOWN to 4.40%. They are consistently dropping 0.05% and their Available Quantities are significantly DOWN. (FWIW, I've been pointing this up for months on these threads.)
    Same for the next line - not sure what current BUYs on farthest end of ladders.
    Farthest end of the ladder for this discussion is 5 years, or IF you plan to go out further, 10 years. To wit, the "short end of the curve" is the % closest to ZERO.
    I think I understand not bothering the Jan and March BUY's - wait until a couple of weeks before they expire to decide as it's a guessing game until then.
    Don't bother with the specifics until then. We have only educated guesses as to what respective rates and quantities will be available then. With interest rates, I always try to deal with what we know NOW. We know the current rates, available quantities and the current trend(s). We did have that period over the past coupla years where we were reasonably certain the Fed was going to raise rates. We're still in the guessing stage on what happens next and when.
    I don't understand the last paragraph. I currently have a one year no penalty CD and a another one penalty CD for the amounts shown. Not sure how to make them non-taxable.
    Seems to be a misunderstanding on this. I did NOT suggest anything in your txbl a/c could be made non-txbl. Suggest re-reading what I posted and quote the line(s) you don't understand.
    Can you modify my plan above to show me what you would do it.
    Hmm...I've kinda put a wee bit of effort in here already, no? If you re-read my post and factor in these responses, you should be able to do that. Seems kinda clear to me, no?
    I realize you are not giving me advice - it's only an example. I know you don't know all of the facts. Are you an advisor (just curious). Thanks in advance!
    You're welcome. No, not an advisor. Life-time bean counter, governmental and private audit manager. Grew up as many did wanting to "be able to live off the interest." Life-long manager of portfolios of several, never-paying* friends and relatives. Owned CD ladders for ~15 years.
    * = And I have never asked them!
    stillers stillers in Fund Discussions
  • High yield long term CDs
    @Jan:
    Disclaimer: You likely gave your advisor the detail of your current investments and your projected income gap upon retirement, along with risk profile information. That is all needed for anyone here or elsewhere to provide quality advice.
    Without all that, here's what I'd offer you as suggestions/ideas:
    Know that predicting the future of interest rates, their rates and the magnitude of their moves, is a fool's game.
    Only BUY brokerage CDs IF you reasonably KNOW you will NOT need the proceeds before their respective maturity dates. Selling them as Secondary Issues will cost you dearly at this point in time (and likely for months/years to come), IF you can be lucky enough to find a BUYer.
    Only BUY CP CDs to eliminate the guessing game on your holdings and risk of them being Called before their normal Maturity Date.
    Know that 3-month-to-1-yr rates are holding up the best, and LT rates (out to 5-10 years) are taking weekly, if not daily hits. Consider that trend is likely-to-very likely to continue, which should cause you to consider building the far end of the ladder as soon as possible.
    The "do now" stuff appears fine but I would make any current the BUYs on the farthest ends of your ladder.
    I'd not bother with trying to define any specific BUYs in Feb and Mar '24, or even Jan '24. (See my first comment about predicting the future interest rates.) We can guess what's gonna be available then, but we have no certainty those guesses will be anywhere near accurate. You can have a general plan for future dates, but leave the specifics TBD by your research in the week-to-two weeks leading up to getting those proceeds.
    I have no idea why he recommended the last item related to CDs in your taxable a/c best serving you IF at 2-yr intervals. I have no CDs in taxable a/c's. If I did, I would want them to be the ones at the shorter end of my ladder for the very reason he gave, to "give you added financial flexibility in retirement." 2-year CDs does NOT give you the flexibility (not the interest rates!) that 6-month, 1-yr and 18-month CDs would.
    stillers stillers in Fund Discussions
  • High yield long term CDs
    Admitting that I have a lack of knowledge, I decided to hire an advisor who was recommended to me by a couple of friends who have used him for many years. I pay him by the hour and he is charging me 3 hours which I feel is reasonable.
    I am 71 and will retire in 6 months to one years time so this isn't a retirement advice. I am very conservative with money. My objective is to generate as much as income as possible form the interest .I have a decent amount of social security in addition to this as I have worked for 50 plus years and didn't claim SS until I was 70.
    My question: I think it would be good to lock in 5 or even 10 year CD's rates as they are north of 4% and that would yield a decent amount of returns. I am concerned if I use CD ladders, the rates which are going to fall sooner than later might end up losing me money in the end.
    I will meet with him soon and he will answer any questions/concerns I have. I would greatly appreciate your opinion and or advice as this would enable me to ask him questions.
    His comments:
    Goal:
    To move cash to longer maturity CDs/Treasuries to take advantage of relatively high interest rates over a longer period of time.
    Things that can be done now:
    In your Company 401k Brokerage link:
    Buy a $100k 2-year CD. (Non-callable)
    Buy a $90k 3-year CD. (non-callable)
    Buy a ~$87k 4-year CD. (non-callable)
    In Feb ’24 when the Bank CD in the IRA matures:
    Invest 100k in a 1-year CD.
    Invest $100k in an 5 year CD.
    Leave ~$17k in cash.
    In March ’24 when the CDs in the Bank taxable account mature:
    Buy a $70k 1-year CD.
    Buy a $70k 2-year CD. (no penalty)
    Other things to note:
    If we build this CD ladder, eventually you will get the average 5-year rate. When a 1-year CD matures, you can buy a 5-yearCD. There should be at least one CD maturing every 12 months.
    I have intentionally left cash in the IRA and “non-CD” funds in the 401k. This because at some stage you will have RMDs and we don’t want the CD ladder to interfere with taking them.
    I think the taxable CDs should be in 24-month intervals. This will give you added financial flexibility in retirement.
    Jan in Fund Discussions
  • Fidelity Conservative Income FCNVX - small tweaks to risks
    While tweaking is under discussion, M* notes that TRP’s TRRIX has been “on the tweek” so to speak.
    ”The team (that manages TRRIX) has made several changes to the underlying holdings over the past several years, adding both T. Rowe Price Hedged Equity PHEFX and T. Rowe Price Dynamic Credit RPELX to the portfolio in 2023. Both strategies add an element of volatility hedging and dynamic risk adjustment to their respective asset classes. Although hedging won’t necessarily improve the portfolio’s average risk-adjusted return, the hedges may cushion losses and reduce the maximum drawdown during bear markets, in exchange for reducing the potential upside.”( Excerpted from Morningstar)
    @msf has referenced a Fidelity income fund. While TRRIX now calls itself a “balanced (40/60) fund” that was not always the case. At inception about 20-25 years ago it eas actually called the: “T. Rowe Price Retirement Income Fund”.
    TRRIX suffered double digit losses in 2022. That’s a lot for this fund. Glad TRP is tweaking. Perhaps they should have been quicker on the stick. YTD the fund is up +7.8%. That’s still a long way from making up for last year’s loss.
    hank in Fund Discussions
  • Fidelity Conservative Income FCNVX - small tweaks to risks
    Prospectus Supplement, Dec 1, effective Dec 6
    Monthly Fact Sheet
    Max average maturity - Was 0.75 years, now 1 year max (as of 11/30/23 actual avg maturity is 0.53 years)
    Max security maturity - Was 2 years (3 years for floating rate securities), now 4 years
    Max pct invested in lower quality IG securities - Was 5%, now unlimited (possibly subject to the 20% restriction for investing outside of its "normal" investment)
    Judging from the 10/31/23 composition of the portfolio (28% A rated, 6% BBB rated), it looks like "lower quality IG securities" means BBB, while A-rated securities are considered higher quality.
    msf in Fund Discussions
  • High yield long term CDs
    A few years back & I was happy to get 3% on a two year CD. I see 3 year notes are on the firing line & will put forth a few $$'s that way.
    Have a good weekend, Derf
    Derf in Fund Discussions
  • "Green Investors Have New Room to Grow"
    @Baseball_Fan, excellent points on the portfolios of many "ESG" funds. They're shaky on the E, and often cra crummy on the S and G.
    Sure, BIAWX had a good year. But you're paying 79 cents for the same old stuff that has created a good year for lots of funds, some of which charge less. And many of the green funds charge a lot more.
    Been trying for years to get my wife to cut the Amazon cord.
    WABAC WABAC in Fund Discussions
  • "Green Investors Have New Room to Grow"
    James Mackintosh, who has always been adamantly skeptical of ESG/SRI/green investing (though less loudly opposed to anti-woke/red investing, perhaps because it's so marginal), offered a nice analysis today (WSJ, 12/06/23, B1)of the year's ESG crumple and its prospects going forward.
    "Invest according to your political views," he begins, "and you're unlikely to make money." One might point out that ESG investing isn't merely a political gesture (the "G" in ESG, especially, is predictive of corporate performance), but he's never been interested in nuance. And, heck, why bother pointing out that the Equal Weight ESG 500 has higher returns over the past year than the Equal Weight 500 (1.2% vs 0.7%, as of 12/6/2023). Or even that the ESG-screened 500 has outperformed the basic 500 over the same time period (15.7% vs 14.0%). And, by the way, the same is true over the past five years. It's much more fun to highlight the implosion of a few clean energy stocks and declare, "point made!"
    The point that makes me less irked with him is "investors who bought green stocks probably didn't think they were making a leveraged bet on Treasuries, but that is what they ended up with." He argues that rising interest rates impact renewable energy stocks (for which he uses the synonym "green stocks") two ways. First, renewable energy projects are 80% debt-funded, and debt is increasingly expensive and hard to acquire. Second, consumers making personal investments in "green" products - heat pumps, solar, electric cars - also use debt, whether credit cards, HELOCs or second mortgages, to finance them. Higher borrowing costs lead to lower demand for those products.
    High costs shift people's attention from the long-term - the need for renewables and global heating - to the short term - the need to cover the bill.
    He also argues that much, though not all, of the "greenium" has been squeezed out of the market. Valuations on renewables are way down, if not deeply discounted. That makes that more economically rational purchases now than they were two years ago.
    My sole green holding, which I've discussed in each of my annual portfolio disclosures, is Brown Advisory Sustainable Growth. It's up 32.4% YTD and has eked out 16% APR since I first bought it. Which is to say, I'm not sure that Mr. Mackintosh's analysis is quite so clear and profound as might be warranted by inclusion in the world's premier business paper.
    David_Snowball in Fund Discussions
  • Trying to learn more about BCRED
    Thanks @yogibearbull. Sounds like a treacherous area. Rowan’s (house view) argument is that for many investors “liquidity” is being oversold (and is costly). His “sell” is that most of us need perhaps 10% of our invested assets at any one time (ie in the next 3 years). Even to me that sounds like a difficult argument to make (and losing half your money doesn’t sound like a great idea).
    If folks are inclined, perhaps the scope here could be broadened to discuss valuations in both the public & private markets. Despite many nay-sayers at the start of ‘23, the public markets - especially the S&P - have plowed ahead. Always trying to learn more here - to go beyond simply looking at a fund’s 10 year track record and assuming it’s a relatively profitable / safe / predictable investment.
    hank in Fund Discussions
  • Trying to learn more about BCRED
    If you're interested in them, maybe consider one of the ETFs or CEFs that hold BDCs. I'm sure at some point these things will be included in them.
    As for me, i have no interest in those specific names, but am considering BIZD for exposure to the finance sector and play on interest rates over the next few years. (I still have a very hard time buying bank stocks.)
    rforno in Fund Discussions
  • the December issue of MFO
    Pretty much the same experience here. A good friend, also also a retired doctor, started letting down his guard about a year ago. Started going back to the SF Symphony, and eating out with others.
    Now he has Long Covid, with loss of taste.
    My wife and I had season tickets to the SF Symphony for almost thirty years, but haven't been to any entertainment venue since the start of all this. Really miss the Symphony, the SF Jazz Center, and a jazz restaurant that we went to for over 20 years. Almost all of the jazz groups that appeared at that restaurant no longer appear there either. This whole thing is a real bummer.
    Old_Joe Old_Joe in Fund Discussions
  • Best month for bonds in nearly four decades
    A bond trader doesn't care what happened, only how to make money in the future.
    Examples
    PIMIX made 8-10% for several years with low SD.
    IOFIX fell 45% in 03/2020, but after that it exploded 40-50%.
    Cat bonds did not make much in previous years but did well in 2023 with a very low SD.
    HY munis made several times 3+% during 2022-23 and much more in Nov 2023.
    Woohoo.
    FD1000 in Fund Discussions
  • Alaska buys Hawaiian. Wow.
    As a member of the Alaska Airlines million mile club I am opposed to this merger. Hawaiian Airlines has lost money in 14 of the last 15 quarters. When Alaska bought Virgin they were stuck with a bunch of crummy Airbus planes that were non compatible with their Boeing fleet. It took about 3 years to fix. Why not let them fail?
    Mitchelg in Other Investing
  • Alaska buys Hawaiian. Wow.
    CNBC: "Hawaiian’s stock nearly tripled on Monday to $14.22 a share, though still below the proposed purchase price. Alaska’s shares lost 14.2% to end the day at $34.08."
    I'm still not planning to ever invest in any airline. That's a change from years ago, for me. For those so inclined, here's a major dip in ALK shares. Have at it. :)
    Remember the old quote "how do you become a millionaire? Become a billionaire and then buy an airline." :)
    Or in modern parlance, be like Elon Musk and keep making super-jenius acquisitions.
    rforno in Other Investing
  • Alaska buys Hawaiian. Wow.
    CNBC: "Hawaiian’s stock nearly tripled on Monday to $14.22 a share, though still below the proposed purchase price. Alaska’s shares lost 14.2% to end the day at $34.08."
    I'm still not planning to ever invest in any airline. That's a change from years ago, for me. For those so inclined, here's a major dip in ALK shares. Have at it. :)
    Crash Crash in Other Investing