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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.
  • CD Rates Going Forward
    I don’t own or track a single bond fund that has produced an average annual return approaching 5% over the past 5 or 10 years
    That time frame includes a couple very bad years for bonds during the FED rate hikes, so of course averages will be lower. If you look forward as the FED slows and completes their interest rate hikes, those statistics will likely change again for the better for income funds. Just my opinion. That change may have already happened. PIMIX has gained 5% in just the 1st half of 2023. Projection and extrapolating data is a risky business, but, what is to keep income funds from continuing that trend moving forward?
    Not saying buying treasury or CD ladders now at 5% isn't a safe and prudent investment. It certainly is. Especially for retirees or those close to it. I've been doing it too. I do think, though, that when we look back a year or 2 from now, income funds may be winning the race.
    MikeM MikeM in Fund Discussions
  • CD Rates Going Forward
    This morning, Schwab brokerage MM SWVXX is paying 5.17% and SNAXX is paying 5.32%. CD rates at Schwab seem to be about in this same MM range, with anything over a year being less than the MM rates. I had a CD mature yesterday, which I have decided to park in SWVXX for now.
    dtconroe in Fund Discussions
  • CD Rates Going Forward
    1-yr T-Bill was at 5.37% yesterday. Auction is on Tuesday, settles on Thursday.
    https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202308
    yogibearbull yogibearbull in Fund Discussions
  • CD Rates Going Forward
    I don’t own or track a single bond fund that has produced an average annual return approaching 5% over the past 5 or 10 years
    Neither do I, but some posters here do track or own BGHIX / BGHAX. This fund has returned at least 5.5% annualized over the past five years.
    Regardless, it's pointless to project past fixed income returns into the future. I don't know of any MMF that yielded 4% over the past several years, yet many taxable MMF now yield at least that much. Rates have risen.
    Unlike CDs, you can readily sell Treasuries if you need the cash prematurely.
    CDs that are purchased directly from an issuer often carry a put option. That is, you can redeem them (sell them back to the issuer) albeit with a penalty (strike price below par).
    For example, you can save like a Senator via The United States Senate Federal Credit Union. It offers fixed rate share certificates (the CU equivalent of CDs) yielding more than5% for up to 3 years. Though they come with substantial loss of interest early withdrawal penalties.
    msf in Fund Discussions
  • Fitch Downgrades US from AAA to AA+
    DBRS Morningstar confirmed the United States of America’s Long-Term Foreign and Local Currency – Issuer Ratings at AAA.
    In addition, DBRS Morningstar confirmed the United States of America’s Short-Term Foreign and Local Currency – Issuer Ratings at R-1 (high). The trend on all ratings is Stable.
    https://www.morningstar.com/markets/dbrs-morningstar-confirms-united-states-aaa-stable-trend
    msf in Other Investing
  • CD Rates Going Forward
    @Tarwheel. +1. Agree totally. 5% is a winner for this retired guy.
    larryB in Fund Discussions
  • CD Rates Going Forward
    You can lock in non-callable CDs with rates exceeding 5% up to two years and 4.5% up to five years. I don’t own or track a single bond fund that has produced an average annual return approaching 5% over the past 5 or 10 years. What’s not to like about CDs yielding close to 5% or more? By waiting to see if rates go higher, you could be passing up an opportunity of the decade. If rates go higher, so what? Create a ladder and take advantage of the increase.
    We’ve all seen over the past year that bond funds can be very, very risky and produce abysmal returns over long periods of time. Their returns do not necessarily provide ballast during periods when stocks drop. They can let you down when you need them the most.
    Tarwheel in Fund Discussions
  • Champlain Strategic Focus Fund in registration
    https://www.sec.gov/Archives/edgar/data/890540/000139834423013984/fp0084628-1_485apos.htm
    TheShadow TheShadow in Fund Discussions
  • MARKETPLACE- Let's do the numbers on CEO pay
    Sad to think this transformation occurred during the years when I was employed full-time, 1970-2012. In my sector, higher ed, we fought like banshees to get a union recognized, then fought some more every 2-4 years to try to carve out some portion of the pie for our people. By the end of my career, I found myself telling an administrator acting as university president to never refer to me, or anyone else for that matter, as a “stakeholder.” The corporatization happened right under our eyes, and by the time I left, MI was a “Right to Freeload” state and my union was having a hard time finding the resources to do its work. If I and my colleagues held anything, it was the part of the stake with the caca on it.
    BenWP BenWP in Other Investing
  • CD Rates Going Forward
    Looked at Vanguard last night, 12-18 month CD's ! A boat load of callable.
    Derf in Fund Discussions
  • Fitch Downgrades US from AAA to AA+
    This Fitch insights page provides more details. https://www.fitchratings.com/topics/us-debt-ceiling#insights
    US Rating DOWNGRADED to AA+
    US GSEs DOWNGRADED to AA+
    US Farm Credit System DOWNGRADED to AA+
    US Corporations Unaffected (so, JNJ & MSFT are AAA)
    US Financials Unaffected (so, NY Life, Northwestern Mutual, TIAA are AAA)
    US M-Mkt Funds Unaffected
    This is more nuanced that what the S&P did in 2011 - it downgraded all US financials along with the US.
    yogibearbull yogibearbull in Other Investing
  • AAII Sentiment Survey, 8/2/23
    AAII Sentiment Survey, 8/2/23
    Bullish remained the top sentiment (49.0%; high) & bearish remained the bottom sentiment (21.3%; low); neutral remained the middle sentiment (29.7%; below average); Bull-Bear Spread was +27.7% (high). Investor concerns: Inflation (still high); economy; the Fed; dollar; crypto regulations; market volatility (VIX, VXN, MOVE); Russia-Ukraine war (75+ weeks, 2/24/22-now); geopolitical. For the Survey week (Th-Wed), stocks were down, bonds down, oil up, gold up, dollar up. Fitch downgraded the US debt to AA+, but it retained AAA for 3 US financials - NY Life, Northwestern Mutual, TIAA. #AAII #Sentiment #Markets
    LINK
    yogibearbull yogibearbull in Other Investing
  • CD Rates Going Forward
    dt: I bought a 12 month 5% CD yesterday. I know that I could have gotten a higher rate with a brokered CD, but wanted to stay with my credit union. As you know, I have always tried to keep it simple for my wife's sake. Now, I have come to the point that I need to keep it real simple for myself. I realize my thinking is slowing. There may be a whole new strategy sometime in the near future.</
    >
    hondo, sounds good to me. I can get Money Markets over 5% for now, but I can live with 5+% CDs as long as they are available. I am willing to go longer term than 1 year in my IRA account, but in my taxable account I prefer to stay more liquid with shorter term offerings. I think I could go back to investing in bond oefs, but it feels good to be able to talk to my wife about CDs, and she shows interest and actually offers opinions on terms and rates. Right now, I am just happy to have CDs to make some money, and it certainly is a lot less stress and worry for me.
    dtconroe in Fund Discussions
  • Munger on "diworsification." (link.)
    Haven't bought paint recently. I buy Dunn Edwards when I do. They provide Munsell numbers on their colors which makes it a lot easier to do a great job -- assuming you're doing the proper prep work.
    Benjamin Moore's color "system" requires an advanced degree in hermeneutics, and a lot of sample pots and guess work.
    I think the neighborhood Ace carries mainly Moore paint if you’re fussy about color / texture. They do lend out their color sample books (with like 10,000 colors) - handy if you’re trying to match to an existing wall. Longer drive to Lowe’s and HD. Not a lot of difference in price. I’ve tried cheaper brands from Walmart in the past with mixed results. Not worth a gamble for any important interior job considering all the labor involved (moving furniture, etc.)
    hank in Other Investing
  • Fitch Downgrades US from AAA to AA+
    Good news is that Fitch is NOT downgrading all US financials to AA+ (as the S&P did in 2011). So, Fitch is maintaining AAA ratings for "New York Life Insurance Company, Northwestern Mutual Life Insurance Co. and Teachers Insurance and Annuity Association of America".
    https://www.fitchratings.com/research/insurance/insurance-aaa-unaffected-by-us-downgrade-financial-conditions-key-risk-02-08-2023
    @Yogibearbull. Thanks. I was wondering today whether some U.S. corporations carry a higher credit rating than the U.S. government. Sounds from your comment that some do. Quite remarkable.
    Fitch did reference political instability in the reasons for the downgrade. Something everyone should keep in mind.
    hank in Other Investing
  • Fitch Downgrades US from AAA to AA+
    Good news is that Fitch is NOT downgrading all US financials to AA+ (as the S&P did in 2011). So, Fitch is maintaining AAA ratings for "New York Life Insurance Company, Northwestern Mutual Life Insurance Co. and Teachers Insurance and Annuity Association of America".
    https://www.fitchratings.com/research/insurance/insurance-aaa-unaffected-by-us-downgrade-financial-conditions-key-risk-02-08-2023
    yogibearbull yogibearbull in Other Investing
  • Munger on "diworsification." (link.)
    Well, how much cash in Munger holding these days, and how is his portfolio doing?
    Heavy on cash. Best recollection is north of 20%. Around 40% of their equity stake is in AAPL.
    Berkshire lost a bit in 2022, but has done very well this year. Better than 10% YTD.
    Thank you Hank.
    Of course, that doesn't include the companies they own outright, but that's not the reason I no longer buy Benjamin Moore paints. We still buy See's Candies from time to time.
    WABAC WABAC in Other Investing
  • Munger on "diworsification." (link.)
    “Well, how much cash in Munger holding these days, and how is his portfolio doing?”
    Berkshire remains heavy on cash. Best recollection is north of 20%. Around 40% of their equity stake is in AAPL (+54% YTD).
    Berkshire lost a bit in 2022, but has done very well this year. Better than 10% YTD.
    To each his own. If diversification is the refuge of cowards, I’m guilty as charged. It’s harder to muck things up ISTM if widely diversified. No single stupid move is going to screw things up too badly.
    hank in Other Investing
  • Fitch Downgrades US from AAA to AA+
    I’m befuddled as to where the markets are heading (I mean more so than usual). Took a bit of risk off the table this week. I don’t think the downgrade in credit rating was a big reason for today’s turbulence. Maybe a good excuse to unload some overextended sectors. Everybody & his brother know the S&P, dominated by big tech, is overbought.
    Under ”woulda, coulda, shoulda”, a consumer staples (food) stock I gave up on / sold 2 weeks ago jumped nicely today. Bad timing - again. Looks like consumers staples in general did well today. I’m amazed how well BRK.B continues to hold up. If you look at the historical charts, it has experienced at least 1 steep drawdown. (Don’t own.) Some magic Buffet / Munger potion I guess. And PRWCX has held up better this week than I would have expected (but off .59% today).
    Intermediate and long term bonds at over 4% worth looking at. Will do well in a recession. But probably losers out very long term. Enjoying everybody’s thoughts.
    hank in Other Investing
  • Fitch Downgrades US from AAA to AA+
    Try this yourself.
    Check your credit score.
    Go apply for a bunch of credit (credit cards, student loans, HELOC,etc.)
    Max out all of these cards
    Apply for more Credit
    Max that out
    You discuss your credit related debt with your wife… she says, “raise your debt ceiling”
    You divorced your wife on grounds of insanity
    Your net worth is cut in half
    Your 2.5 kids move back in with you
    Your Ex-wife never moves out because it's too expensive for her to buy or rent
    She starts dating your financial advisor
    He now collects more than 1% for his services
    You lose your job
    You check your credit…oops, you have been downgraded.
    Highlights:
    It’s important to recognize how your financial behaviors may impact your credit scores
    There are several factors that are used to calculate credit scores
    There are many different credit scoring models, or ways of calculating credit scores
    Makes sense to me why US Credit score just dropped!
    https://equifax.com/personal/education/credit/score/how-do-your-actions-affect-your-credit-scores/
    bee bee in Other Investing