The Agony of Hope Postponed, By A Value Investor Here’s the link to Ted’s story:
https://blogs.wsj.com/moneybeat/2019/07/16/wsj-wealth-adviser-briefing-value-investors-high-yield-bonds-luxury-travel/Sometimes I grow weary of this horse race mentality and the bemoaning of one’s results if one type investment did better than another. Now, if someone else’s growth funds yielded
12% a year over a decade while your value funds yielded “only” 9 or
10%, would that be reason for lamentation?
You still did a lot better than someone who invested in soybeans, oil,
GNMAs, or short-term bonds. Return should be commensurate with the risk undertaken. So you could argue nobody “lost” in the article’s comparison. Each investor was rewarded according to the degree of risk he was willing to undertake. Growth investing is generally deemed more risky than buying beaten up value stocks.
A good song that uses horse racing to analogize life might be George Jones’
“The race is on ...” . Too far out of bounds for me to link here. But, as I said, that’s the horse race mentality that sometimes pervades these discussions of relative performance.
How are you using global / international bonds in your portfolios? To get a higher yield or simply higher total return. I don't there is much point in purchasing a fund with 10 year duration that yield under 3.5%
How are you using global / international bonds in your portfolios? Curious to hear people's thoughts at mid-year 2019
~ D.S.
a BOND fund? MAINX I'm about 10 years away from retirement so am 70% equities and about 30% in money markets.
@MIkeW, you may want to consider a multi-sector bond fund such as PIMIX to start. In my humble opinion money market funds pay very little and it should be used to meet short term goals. For longer term diversification from equity, bonds are logical choice.
I started with Vanguard Total Bond index years ago in my 40
1(K). Over time I learned to use actively managed bonds. Bill Gross was very good but that was awhile back and there are more choices today.
Michael Batnick: Opposite Of Conventional Wisdom FYI: There was an article in the New York Times that highlighted the reversal of previous findings in medicine.
Of more than 3,000 studies published from 2003 through 20
17 in JAMA and the Lancet…more than one of
10 amounted to a “medical reversal”: a conclusion opposite of what had been conventional wisdom among doctors.
This got me thinking about conventional wisdom in investing that might need further scrutiny. Before I get into it, this thought exercise was way more difficult than I thought it would be. The only piece of conventional wisdom that 90% of investors will nod their head at is “diversification is the only free lunch.”
I was able to come up with five items where I think the opposite of conventional wisdom is true.
Regards,
Ted
https://theirrelevantinvestor.com/2019/07/16/opposite-of-conventional-wisdom/
Jonathan Clement's Blog: Solomon On Money: Read Your Bible FYI: THE MOST WIDELY read book of all time, the Bible, has a lot to say about money. According to biblical scholars, money and wealth are mentioned more than 2,000 times. Out of the roughly 40 parables Jesus told, nearly half speak of money.
Why does the Bible make such a big deal about money? The answer belongs in a Sunday sermon, not here. Still, I believe there’s a great deal to be learned from what the Bible says about money.
Below are eight verses, all written by King Solomon. Solomon was the wealthiest man of his time. But he was also renowned for his great wisdom. Although he lived almost 3,000 years ago, his insights on money and wealth remain relevant today. Here’s Solomon on money:
Regards,
Ted
https://humbledollar.com/2019/07/solomon-on-money/
You'd Be Better Off Just Blowing Your Money: Why Retirement Planning Is Doomed FYI: I know this is a bold, and possibly controversial title, but retirement planning is broken and leaving people broke.
The destructive narrative is, “work hard, save money in a retirement plan, wait and it will all work out in the long run.”
The reality is, without the ingredients of responsibility and accountability, there is no easy solution for retirement. Meaning, if we just work hard and set money aside, we are putting money into a market we have no control over.
The institutions are winning though. Taking fees along the way. Convincing us to separate ourselves from our hard earned money, encouraging us to take it out of the business we know and put it into investments we don’t.
Regards,
Ted
https://www.forbes.com/sites/garrettgunderson/2019/07/16/youd-be-better-off-just-blowing-your-money-why-retirement-planning-is-doomed/#31d23618302d
The Agony of Hope Postponed, By A Value Investor FYI: Value investors are known for being a hardy bunch, willing to buy into beaten-down stocks that everyone else thinks are a disaster. But cheap stocks have underperformed horribly over the past 12 years, and even some fund managers who specialize in buying them wonder in private if the technique no longer works. Could value be dead?
Regards,
Ted
a BOND fund? MAINX Thanks
@Crash and
@Junkster for sharing your current holdings. Junkster it sounds like IOFIX is a long term holding for you and not one that you trade in and out of. I'm about
10 years away from retirement so am 70% equities and about 30% in money markets. I've been looking for an entry point into bonds all year but have shied away because I keep expecting rates to rise... have been wrong to date. Certainly hard to establish a position now with the big run up in bonds.
a BOND fund? MAINX ”Other than IOFIX, my positions and opinions can change quickly based on market action. I may sell two of my holdings today. I guess that is why I get so many warning and ban notices from some fund companies because of my trading activities.”
Love it! Thanks for sharing
@Junkster.
You remind us that
bond investing can resemble anything from
driving a Studebaker ...
To
driving a Ferrari!
All depends.
a BOND fund? MAINX "....
If anyone missed the first half rally in bonds I would be concerned about suddenly chasing performance now."
That makes perfect sense.
@MikeW my global bond fund is PRSNX , yes, it's with TRP. Up +7.05% ytd. Can't complain. But that puts it into the middle of the pack, at 45th percentile. Morningstar claims to have improved their website. That's hogwash. Four mouse-clicks now to get what I used to find with just one. Anyhow, my numbers here are from Morningstar. And Morningstar has lately changed the category where PRSNX belongs. Now, they've lumped it with World Bonds, but "US dollar hedged." Last month's dividend was down quite a bit...
My other bond fund is PTIAX. I'm quite happy there, too. Ytd, up +5.47%. June's monthly dividend jumped to 9 cents/share. PRSNX is 49.77% of my total. PTIAX is growing a tiny bit every month, with small automatic deposits, and I'm still reinvesting everything. Today, it represents 4.72% of my portfolio--- if you include my wife's 403b---still not quite $
10,000.00 in there, yet.
Long Term Is Longer Than You Think Interesting short read. I turn 70 in a few months. Based on my current health status and the life spans of my parents and grandparents, I currently have my investment time horizon set at 21 years. I would be 90 years old at that point. Its been set at 90 since 2014 when I added an annual review of my planning horizon to my annual year-end portfolio review process. So, the chart makes sense to me.
Your investment time horizon seems reasonable. I say that because most everyone seems to overestimate how long they will live and think they will all live to
100. Longevity tables show those around our age ( I am 72) should live to 84/85. My high school and college classmates are dying off at an alarming rate. I am not sure in the U.S. lifespans are still expanding since obesity and being overweight has become so rampant over the past many years. Anyway, I never think about how many years I have left. Just try to live each day as if it is my last and spend some time each day on the trails, preferably in the middle of nowhere.
