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Floating Rate Funds In A COVID-19 World: Buy Or Sell?
Floating Rate Funds In A COVID-19 World: Buy Or Sell?
Volatility has taken over, and if you’re like most folks, you’re wondering where to find the safe dividends you need to sustain your savings—and income stream—as this pandemic drags on.
I use FR(floating rates) funds only for trades. FR are one of the best bond categories when rates are going up because of their very short duration. FR are a subcategory of HY and when market conditions are risky they lose money just like HY do.
Let's discuss higher distribution of all types, from stocks to bonds and others. I have been debunking it for years now that higher distribution investments are superior to lower ones. You must look at risk/reward and only then look for higher distributions. The most disturbing is when a retiree MUST have a certain % withdrawal and insist on investment to support it. Sure, if it's 2-3% no problems but the ones that MUST have 4-5% and more should look at risk/reward first. The most important is TOTAL RETURNS which includes distributions.
Stocks-if the high tech companies such as MSFT didn't convince you now after decades of great performance then nothing will. Bonds-do I must go for HY to get better risk/reward? of course not.
Comments
Let's discuss higher distribution of all types, from stocks to bonds and others. I have been debunking it for years now that higher distribution investments are superior to lower ones. You must look at risk/reward and only then look for higher distributions. The most disturbing is when a retiree MUST have a certain % withdrawal and insist on investment to support it. Sure, if it's 2-3% no problems but the ones that MUST have 4-5% and more should look at risk/reward first.
The most important is TOTAL RETURNS which includes distributions.
Stocks-if the high tech companies such as MSFT didn't convince you now after decades of great performance then nothing will.
Bonds-do I must go for HY to get better risk/reward? of course not.