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Post by racqueteer on Dec 9, 2023 12:25:29 GMT -5
The main problem with RPHIX IS THE $49.95 fee at Schwab. It’s OK for a 1 time purchase but If you are trying to use it as a MM equal, not so much. Several people have been using MM/CD/Treasury for months now, they usually buy for at least 3 months. It also depends on how much you invest. At $100K, $50 is just 0.05%. Schwab SWVXX (0 min) still pays 5.26%...SNAXX(1 million min) pays 5.41%. I prefer to park in funds with very low SD and a better performance until the next trade. ================ raq: I'm a little more interested in the possible pitfalls... What happened in Feb 2022 and to a lesser extent in March 2023?! edit: Hmm... 27 month chart didn't make it. Guess I need a refresher on using Snipping Tool! FD: I don't think markets are now at the above. I only know when I see it. March 2020 was caused because of Covid = extreme case. 2022 was caused because of inflation and the Fed promising to raise rates rapidly. 27 months chart? ( schrts.co/GGWAxxBn)see below. Use the Snipping Tool, then save it (automatically saves as .PNG), then just use "add attachment" above. Not seeing the "add attachment" option anywhere. There are 'inserts' of several kinds, but they all seem to require links to a url. Where is it?
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Post by Admin on Dec 9, 2023 13:14:58 GMT -5
What you need to do is First: do not use quick reply (on left), use reply (on right). Attch 1 Then you will see many options just on top on the left, such as font face+size, color, B=bold...then more on the right link, image...then on the top right corner, Add Attachment. Attachments:
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Post by racqueteer on Dec 10, 2023 7:33:26 GMT -5
I'm not sure why, but your image shows the "add attachment" button next to the settings 'wheel', but it doesn't appear when I start a reply (no, it's not a quick reply). I just have empty space in that spot!?
Fwiw, it works fine for me on Big Bang; just not here...
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Post by Admin on Dec 10, 2023 10:56:00 GMT -5
racq, I fixed it
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Post by racqueteer on Dec 10, 2023 11:18:31 GMT -5
Indeed you did, thank you!
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Post by Admin on Dec 10, 2023 13:20:57 GMT -5
I also fixed the font to be a bit bigger. I asked BB moderator, and he could not find it.
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Post by racqueteer on Dec 10, 2023 13:31:55 GMT -5
I also fixed the font to be a bit bigger. I asked BB moderator, and he could not find it. Nice for us old folks! Be sure to tell chang how to do it!
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Post by Admin on Dec 11, 2023 9:53:23 GMT -5
Another weekly comment from my fund manager Quote: Since the bear market began in 2000, there have been four separate occasions whereby the 10-year Treasury yield has fallen by at least 90 basis points: the middle of 2022, the end of 2022, March of 2023 (in response to the regional banking crisis), and more recently. In all of the three prior episodes, those moves were fully reversed and yields continued to make new multi-decade highs. Only time will tell if the most recent rally is reversed, but we expect that will be the case. Higher rates are presumed to have a cumulative and lagged effect on the economy – Jay Powell has been alluding to this for well over a year now. And, as expected, we are starting to see this in the macro-economic data. Housing was the first industry to feel the effects of Fed policy. And while home prices have remained relatively buoyant, transactional business has been depressed. In fact, existing home sales are at their lowest rate in over 30 years. This makes perfect sense as demand has been crimped by higher mortgage rates and less affordability, and existing homeowners are incentivized to stay in their homes given their prevailing mortgage rates. The Chart-of-the-Week shows another deleterious effect of rates on the consumer. The chart shows the percentage of disposable personal income that personal interest payments consume. And, as you can see, the proportion of income being diverted to interest coverage has spiked over the last year. Ultimately, we would expect this to be a headwind for consumption – and the consumer is by far the largest contributor to U.S. GDP. To put this in context, if interest payments were to be substituted one-for-one with consumption, the recent $300 Billion per year increase in interest payments would shave off about 1% of GDP. We don’t think we have seen this as there is evidence that the consumer is filling this gap through home equity as well as credit card debt. We suspect that increasing debt payment burdens will affect consumption more going forward, and it is one of the many reasons why we are taking a cautious approach to 2024. In our opinion the next recession will provide investors with some great opportunities in corporate credit. We believe that companies will be careful in culling their workforce given what we see as a labor supply shortage. As such, unemployment rates may remain historically low, even in a downturn. We also believe inflation will remain elevated and if the Fed is forced to monetize deficit spending, interest rates and inflation could head much higher. In the meantime, the Fed has allowed itself some leeway to cut rates given their current restrictive stance. As the risks between growth and inflation become more balanced, we believe they will adjust policy lower to a more neutral rate
The beauty of this fund is that I can hold it for weeks and get a performance in the high single digits and while the manager has to worry about risk/reward which I love, I don't. This is why I sold it and traded HY Munis, and bought again.
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Post by sortatino2 on Dec 11, 2023 21:02:52 GMT -5
With MM rates looking to come down in 2024 I am starting to get more interested in Bond OEF Funds. I have been 100% in MM since Feb 2022. The commentary from the fund manager resonates with me. This week will be interesting. Interesting to see from your recent fidelity screen some of the old favorite names pop up again and notable how some of the favorites of the past are missing (IOFIX). I plan to be much more active in 2024. Your approach of holding low volatility funds and doing opportunistic trades with HY Muni and others makes allot of sense to me and will look to mirror that as well.
Thank you for all of the high quality research and insights that you provide and how generous you are with sharing!
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Post by Admin on Dec 13, 2023 17:27:56 GMT -5
The Fed chair blinked on Nov 1st. Today he did it more convincingly hinting about 3 cuts. Most likely, bonds will continue doing better in 2024. A chart ( schrts.co/uiIcBzeV) of ORNAX(HY Muni), DODIX(high-rated bonds) shows that ORNAX has to make about 9% and DODIX about 7% just to get to even. I made changes on Nov 1st and I made changes today before closing.
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Post by Admin on Dec 14, 2023 10:50:26 GMT -5
While the fund manager sounded reasonable several days ago on Dec 11, the market made its case stronger. The 10 year dropped below 4%. I don't fight the market.
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Post by Admin on Dec 16, 2023 10:02:52 GMT -5
In the last couple of weeks, funds that are invested in securitized show momo and several have a good performance for 1 week, YTD + good SD too. Attachments:
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Post by Admin on Dec 19, 2023 7:26:53 GMT -5
www.schwab.com/learn/story/muni-outlook-focus-on-big-picture?cmp=em-XCUMunicipal bonds currently offer yields that mostly haven't been available for the past 15 years, but we don't expect that to last. We look for 2024 to be favorable for muni returns, but it will be characterized by bouts of volatility as the market navigates myriad potential risks and headwinds.
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Post by doubletrouble on Dec 19, 2023 10:03:42 GMT -5
I was playing around with a Morningstar chart for the first time, using ORNAX. The "Data Type" was "NAV". I plugged in a start date of 7-29-21 when the NAV was 8.30, which appears to be the recent high and an end date of yesterday when the NAV was 6.87. The chart say that the fund was down 17.23% during this period. Then I used the same dates but changed the "Data Type" to "NAV with Dividend". The chart say that the fund was down 7.27% during this period.
I think what I am asking is was ORNAX down 17.23% or 7.27% from 7-29-21 to 12-18-23?
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Post by Admin on Dec 19, 2023 10:20:07 GMT -5
I was playing around with a Morningstar chart for the first time, using ORNAX. The "Data Type" was "NAV". I plugged in a start date of 7-29-21 when the NAV was 8.30, which appears to be the recent high and an end date of yesterday when the NAV was 6.87. The chart say that the fund was down 17.23% during this period. Then I used the same dates but changed the "Data Type" to "NAV with Dividend". The chart say that the fund was down 7.27% during this period. I think what I am asking is was ORNAX down 17.23% or 7.27% from 7-29-21 to 12-18-23? You should never use NAV, especially for bond funds, because it does not capture the distributions which are a major part of the total performance. M* default is set up to give you the total performance. BTW, I never look at prices. 7.27 is the correct number, I get 7.13%...pretty close, the difference could be when M* updated the numbers, sometimes it's late for the prior day. Attachments:
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Post by doubletrouble on Dec 20, 2023 13:51:21 GMT -5
Admin, I wanted to see if I could duplicate your chart and I seem to be able to do that.
Morningstar > ORNAX > Chart > Start Date and End Date > default view
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Post by Admin on Dec 21, 2023 0:16:05 GMT -5
So far, the charts and trends support lower interest rates while bond funds continue to zoom up. First, looking at several bond categories for very ST momo of 2-3 weeks, see ( schrts.co/GnUNjEkS). ORNAX as a HY Munis proxy still leads. Second, let's look best risk/reward funds YTD and BDKAX looks very good. Third, one month chart, and RCTIX+BDKAX lead, see below. So, I'm less concerned about what happened in 2022 because it was a unique situation. 2023 wasn't an easy year anyway and BDKAX has done pretty well. BTW, I predicted that several good funds will make 8-10% in 2023, we may see a similar performance in 2024. Attachments:
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Post by expl023 on Dec 22, 2023 14:14:49 GMT -5
BDKAX/BDKNX behaved badly in 2022. It had a sudden mini-crash in the last couple of days of December 2022, which did not have any simple interpretation. But I checked that they changed subadvisors, and at the end of 2022, all of their managers changed. Maybe they liquidated some stuff at a loss at the very end of 2022, and after that, the fund is marching up and up. Therefore, I invested a lot there in March, then moved to another direction, and now I consider it again.
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Post by Admin on Dec 22, 2023 23:46:33 GMT -5
There are several funds BDKAX+IOFIX+SEMMX that have a high concentration in one or more of the following categories: Residential Mortgage-Backed Securities (“RMBS”), Asset Backed Securities (“ABS”), Commercial Mortgage-Backed Securities (“CMBS”), and Collateralized Loan Obligations (“CLOs”). They also have short duration and floaters + smaller AUM + mostly below BBB ratings. In the good old times, before 2018, these funds used to have better risk/reward performance and higher distributions. The last several years exposed their weakness and volatility. They may still be a good trading vehicle. On the other hand, RCTIX also invests significantly in the above categories but also has a nice portion in higher-rated bonds. FPFIX is an interesting fund who have done well over the years but also YTD and 1 month. According to M* it is 77% securitized but its bond rating is much higher at about 80% in IG. Good research leads to more opportunities and finding someone's style and risk. See YTD chart for all 4 ( schrts.co/NsJFSDKX)
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Post by Admin on Dec 27, 2023 13:39:10 GMT -5
So far, the charts and trends support lower interest rates while bond funds continue to zoom up. About a week ago I posted the above and...it keeps going down while I have heard several "experts" saying that rates MUST go up. The chart is my friend, no predictions are required. Attachments:
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