Invest in Separately Managed Bond Account?

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Topic Author
drummer
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Invest in Separately Managed Bond Account?

Post by drummer »

My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
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retired@50
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Re: Invest in Separately Managed Bond Account?

Post by retired@50 »

It seems a couple of the brokerages (Fidelity, Schwab) are advocating for this recently...

See this thread. viewtopic.php?t=351130

My advice would be to skip the "managed" part and just buy a low expense ratio bond index fund like FXNAX if you're interested in owning bonds.

Regards,
This is one person's opinion. Nothing more.
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Stinky
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Re: Invest in Separately Managed Bond Account?

Post by Stinky »

You want alternatives to bond funds.

Many conservative investors, myself included, are looking at fixed annuities these days. They pay much better than bank accounts, money market funds, CD and most bond funds.

There is a good current thread recently titled Purchasing MYGAs (multi year guaranteed annuities) - mega thread that you might want to look at.
viewtopic.php?f=1&t=334589
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anon_investor
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Re: Invest in Separately Managed Bond Account?

Post by anon_investor »

drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
Topic Author
drummer
Posts: 27
Joined: Tue Jun 08, 2021 5:41 pm

Re: Invest in Separately Managed Bond Account?

Post by drummer »

Stinky wrote: Wed Jun 16, 2021 7:22 pm You want alternatives to bond funds.

Many conservative investors, myself included, are looking at fixed annuities these days. They pay much better than bank accounts, money market funds, CD and most bond funds.

There is a good current thread recently titled Purchasing MYGAs (multi year guaranteed annuities) - mega thread that you might want to look at.
viewtopic.php?f=1&t=334589
Thanks...I'll look more closely at those. Also, thanks for the suggestion of the FXNAX bond fund...that makes more sense than getting a managed one.
Topic Author
drummer
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Re: Invest in Separately Managed Bond Account?

Post by drummer »

anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
JustGotScammed
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Joined: Fri Jun 09, 2017 10:16 pm

Re: Invest in Separately Managed Bond Account?

Post by JustGotScammed »

Dump all the bonds as they won't make you diddly. The only people making real money on bonds these days bought them in the 1990s when rates were much higher and got locked in on favorable terms. Get some stocks under your belt and let that money work for you.
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anon_investor
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Re: Invest in Separately Managed Bond Account?

Post by anon_investor »

drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
There are cheaper ways to invest in equities...
MikeG62
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Location: New Jersey

Re: Invest in Separately Managed Bond Account?

Post by MikeG62 »

drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
The yield is 20%? Would you mind adding more color here?
Real Knowledge Comes Only From Experience
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WoodSpinner
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Re: Invest in Separately Managed Bond Account?

Post by WoodSpinner »

drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
Have you compared the Fidelity Federal Equity Income Strategy to its benchmark, the S&P 500?

https://www.fidelity.com/bin-public/060 ... -Sheet.pdf

A quick look would make me pass….. YMMV.

WoodSpinner
capjak
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Re: Invest in Separately Managed Bond Account?

Post by capjak »

i have had the Fidelity Bond SMA for 1 year.

The Fidelity Managed Bond (SMA) total return after expenses is -2.24%. Current balance 344K (starting 350K) $6K lose

The BND fund for example for 1 year total return is +0.5%

So no magic in the SMA bond fund.....(35 individual Bonds that if exited require the customer to liquidate).
Topic Author
drummer
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Re: Invest in Separately Managed Bond Account?

Post by drummer »

capjak wrote: Thu Jun 17, 2021 10:50 am i have had the Fidelity Bond SMA for 1 year.

The Fidelity Managed Bond (SMA) total return after expenses is -2.24%. Current balance 344K (starting 350K) $6K lose

The BND fund for example for 1 year total return is +0.5%

So no magic in the SMA bond fund.....(35 individual Bonds that if exited require the customer to liquidate).
Thank you for that. No bond fund for me at this time.
wetgear
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Re: Invest in Separately Managed Bond Account?

Post by wetgear »

JustGotScammed wrote: Wed Jun 16, 2021 10:24 pm Dump all the bonds as they won't make you diddly. The only people making real money on bonds these days bought them in the 1990s when rates were much higher and got locked in on favorable terms. Get some stocks under your belt and let that money work for you.
This is terrible advice for a retired person, you trying to scam him?
Topic Author
drummer
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Joined: Tue Jun 08, 2021 5:41 pm

Re: Invest in Separately Managed Bond Account?

Post by drummer »

WoodSpinner wrote: Thu Jun 17, 2021 9:08 am
drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
Have you compared the Fidelity Federal Equity Income Strategy to its benchmark, the S&P 500?

https://www.fidelity.com/bin-public/060 ... -Sheet.pdf

A quick look would make me pass….. YMMV.

WoodSpinner
The link you provided leads to a statement from 2017. I have only been in the fund since December 2020, and a more current statement shows the fund beating the S&P...of course that could change.
Topic Author
drummer
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Re: Invest in Separately Managed Bond Account?

Post by drummer »

MikeG62 wrote: Thu Jun 17, 2021 8:20 am
drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
The yield is 20%? Would you mind adding more color here?
I'm not sure what you want. Today's yield is 19.97%. It fluctuates daily and has been as high as 24%. The fund has close to 100 stocks that they manage.

I'm told that if I wanted to dump the management, the stocks would stay with me and I would manage them. Looking at my activity/history, they do make several trades a week. Most of the stocks pay dividends.

I have about 25 stocks that I manage as part of my IRA. I don't have the time or wherewithal to monitor 100+ additional stocks.
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WoodSpinner
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Re: Invest in Separately Managed Bond Account?

Post by WoodSpinner »

drummer wrote: Thu Jun 17, 2021 3:16 pm
WoodSpinner wrote: Thu Jun 17, 2021 9:08 am
drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
Have you compared the Fidelity Federal Equity Income Strategy to its benchmark, the S&P 500?

https://www.fidelity.com/bin-public/060 ... -Sheet.pdf

A quick look would make me pass….. YMMV.

WoodSpinner
The link you provided leads to a statement from 2017. I have only been in the fund since December 2020, and a more current statement shows the fund beating the S&P...of course that could change.
My bad.

Missed that date...,
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retired@50
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Re: Invest in Separately Managed Bond Account?

Post by retired@50 »

drummer wrote: Thu Jun 17, 2021 3:25 pm
MikeG62 wrote: Thu Jun 17, 2021 8:20 am
drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm
drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.

For reference, I am retired, 66 years old, and already have a Fidelity Federal Equity Income Strategy Account that yields 20% with a 0.90 fee.

The money for the bond fund is just sitting in a cash position earning nothing at the moment. I'd like to invest it, but I don't get a good feeling about bonds. Are bonds a good option anymore? Is there a better option? On a risk scale between 1-10, I'm a 5. I'm also pretty financially secure with no debt, a good pension, and I have not started Social Security yet.

Any feelings or suggestions would be helpful. Thanks!
Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
The yield is 20%? Would you mind adding more color here?
I'm not sure what you want. Today's yield is 19.97%. It fluctuates daily and has been as high as 24%. The fund has close to 100 stocks that they manage.

I'm told that if I wanted to dump the management, the stocks would stay with me and I would manage them. Looking at my activity/history, they do make several trades a week. Most of the stocks pay dividends.

I have about 25 stocks that I manage as part of my IRA. I don't have the time or wherewithal to monitor 100+ additional stocks.
drummer,
You're relatively new here, but in case you hadn't noticed, the Bogleheads.org site is built around the ideas and advice of Jack Bogle.

Are you familiar with stock index funds, and passive investing in general?

Maybe read more about this site's philosophy just to see if any of it resonates with you.
https://www.bogleheads.org/wiki/Boglehe ... philosophy

The very general idea is to hold a broad market portfolio using index funds for US stocks, International stocks, and US bonds. By using extremely low expense ratio, tax efficient mutual funds or ETFs, investors tend to do better over the long term.

By using a stock picking adviser who is also charging 90 basis points you might be putting yourself in a worse position over the years.

Best of luck to you, whichever way you decide to proceed.

Regards,
This is one person's opinion. Nothing more.
Topic Author
drummer
Posts: 27
Joined: Tue Jun 08, 2021 5:41 pm

Re: Invest in Separately Managed Bond Account?

Post by drummer »

retired@50 wrote: Thu Jun 17, 2021 3:41 pm
drummer wrote: Thu Jun 17, 2021 3:25 pm
MikeG62 wrote: Thu Jun 17, 2021 8:20 am
drummer wrote: Wed Jun 16, 2021 10:02 pm
anon_investor wrote: Wed Jun 16, 2021 7:54 pm

Why are you paying 0.9% AUM?
That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
The yield is 20%? Would you mind adding more color here?
I'm not sure what you want. Today's yield is 19.97%. It fluctuates daily and has been as high as 24%. The fund has close to 100 stocks that they manage.

I'm told that if I wanted to dump the management, the stocks would stay with me and I would manage them. Looking at my activity/history, they do make several trades a week. Most of the stocks pay dividends.

I have about 25 stocks that I manage as part of my IRA. I don't have the time or wherewithal to monitor 100+ additional stocks.
drummer,
You're relatively new here, but in case you hadn't noticed, the Bogleheads.org site is built around the ideas and advice of Jack Bogle.

Are you familiar with stock index funds, and passive investing in general?

Maybe read more about this site's philosophy just to see if any of it resonates with you.
https://www.bogleheads.org/wiki/Boglehe ... philosophy

The very general idea is to hold a broad market portfolio using index funds for US stocks, International stocks, and US bonds. By using extremely low expense ratio, tax efficient mutual funds or ETFs, investors tend to do better over the long term.

By using a stock picking adviser who is also charging 90 basis points you might be putting yourself in a worse position over the years.

Best of luck to you, whichever way you decide to proceed.

Regards,
Thank you, retired@50. I am indeed familiar with the philosophy. The part of my IRA that I manage contains VTI & VXUS...which lead me to seek out some bond funds, hence this post. After more research I think I'm probably going to end up with a bond ETF.

I don't like paying the 0.90%, but I also don't want to be penny wise and pound foolish as long as the fund is producing a good yield. All it takes is a phone call to end Fidelity's management.
JustGotScammed
Posts: 72
Joined: Fri Jun 09, 2017 10:16 pm

Re: Invest in Separately Managed Bond Account?

Post by JustGotScammed »

wetgear wrote: Thu Jun 17, 2021 3:16 pm
JustGotScammed wrote: Wed Jun 16, 2021 10:24 pm Dump all the bonds as they won't make you diddly. The only people making real money on bonds these days bought them in the 1990s when rates were much higher and got locked in on favorable terms. Get some stocks under your belt and let that money work for you.
This is terrible advice for a retired person, you trying to scam him?
I don't understand how generally recommending stocks is trying to scam someone, but I would disagree that buying stocks is terrible advice. That's where the real wealth in America has been made. Low-yield bonds lose purchasing power over time, guaranteed.
wetgear
Posts: 369
Joined: Thu Apr 06, 2017 10:14 am

Re: Invest in Separately Managed Bond Account?

Post by wetgear »

JustGotScammed wrote: Thu Jun 17, 2021 4:13 pm
wetgear wrote: Thu Jun 17, 2021 3:16 pm
JustGotScammed wrote: Wed Jun 16, 2021 10:24 pm Dump all the bonds as they won't make you diddly. The only people making real money on bonds these days bought them in the 1990s when rates were much higher and got locked in on favorable terms. Get some stocks under your belt and let that money work for you.
This is terrible advice for a retired person, you trying to scam him?
I don't understand how generally recommending stocks is trying to scam someone, but I would disagree that buying stocks is terrible advice. That's where the real wealth in America has been made. Low-yield bonds lose purchasing power over time, guaranteed.
It's true it's not a scam that's more of a user name comment but recommending someone in early retirement take money dedicated to the purchase of bonds and instead buy stock with it sets them in a too risky AA. OP needs stability in their portfolio to deal with a potential sequence of return risk. This is perhaps the most risky time for OPs portfolio why advise them to double down on that risk? OP also mentions he is a 5 on a 1-10 risk scale so having a large increase in risk isn't a move that is within their comfort level.
Doctor Rhythm
Posts: 974
Joined: Mon Jan 22, 2018 3:55 am

Re: Invest in Separately Managed Bond Account?

Post by Doctor Rhythm »

drummer wrote: Thu Jun 17, 2021 3:53 pm
retired@50 wrote: Thu Jun 17, 2021 3:41 pm
drummer wrote: Thu Jun 17, 2021 3:25 pm
MikeG62 wrote: Thu Jun 17, 2021 8:20 am
drummer wrote: Wed Jun 16, 2021 10:02 pm

That is the fee for the Federal Equity Income Account (not a bond fund), which is totally stocks.
The yield is 20%? Would you mind adding more color here?
I'm not sure what you want. Today's yield is 19.97%. It fluctuates daily and has been as high as 24%. The fund has close to 100 stocks that they manage.

I'm told that if I wanted to dump the management, the stocks would stay with me and I would manage them. Looking at my activity/history, they do make several trades a week. Most of the stocks pay dividends.

I have about 25 stocks that I manage as part of my IRA. I don't have the time or wherewithal to monitor 100+ additional stocks.
drummer,
You're relatively new here, but in case you hadn't noticed, the Bogleheads.org site is built around the ideas and advice of Jack Bogle.

Are you familiar with stock index funds, and passive investing in general?

Maybe read more about this site's philosophy just to see if any of it resonates with you.
https://www.bogleheads.org/wiki/Boglehe ... philosophy

The very general idea is to hold a broad market portfolio using index funds for US stocks, International stocks, and US bonds. By using extremely low expense ratio, tax efficient mutual funds or ETFs, investors tend to do better over the long term.

By using a stock picking adviser who is also charging 90 basis points you might be putting yourself in a worse position over the years.

Best of luck to you, whichever way you decide to proceed.

Regards,
Thank you, retired@50. I am indeed familiar with the philosophy. The part of my IRA that I manage contains VTI & VXUS...which lead me to seek out some bond funds, hence this post. After more research I think I'm probably going to end up with a bond ETF.

I don't like paying the 0.90%, but I also don't want to be penny wise and pound foolish as long as the fund is producing a good yield. All it takes is a phone call to end Fidelity's management.
Let’s be clear on the terminology. Your managed stock portfolio returned 20% in some unspecified time period. The yield on your stocks - which is to say the distribution of dividends or income — is probably more like 1-2% annually or maybe a bit more if they are concentrated in value stocks. The words are commonly interchanged in normal conversation, but since this thread is about bonds and interest rates, I think the distinction is important.

Now, is that 20% you mentioned the annualized return over many years? That would be pretty good, but I’m thinking that’s not the case since you mention the number changes daily. Is it the the past 12 months’ return? If so, that would be pretty awful.
Topic Author
drummer
Posts: 27
Joined: Tue Jun 08, 2021 5:41 pm

Re: Invest in Separately Managed Bond Account?

Post by drummer »

Doctor Rhythm wrote: Thu Jun 17, 2021 5:18 pm
drummer wrote: Thu Jun 17, 2021 3:53 pm
retired@50 wrote: Thu Jun 17, 2021 3:41 pm
drummer wrote: Thu Jun 17, 2021 3:25 pm
MikeG62 wrote: Thu Jun 17, 2021 8:20 am

The yield is 20%? Would you mind adding more color here?
I'm not sure what you want. Today's yield is 19.97%. It fluctuates daily and has been as high as 24%. The fund has close to 100 stocks that they manage.

I'm told that if I wanted to dump the management, the stocks would stay with me and I would manage them. Looking at my activity/history, they do make several trades a week. Most of the stocks pay dividends.

I have about 25 stocks that I manage as part of my IRA. I don't have the time or wherewithal to monitor 100+ additional stocks.
drummer,
You're relatively new here, but in case you hadn't noticed, the Bogleheads.org site is built around the ideas and advice of Jack Bogle.

Are you familiar with stock index funds, and passive investing in general?

Maybe read more about this site's philosophy just to see if any of it resonates with you.
https://www.bogleheads.org/wiki/Boglehe ... philosophy

The very general idea is to hold a broad market portfolio using index funds for US stocks, International stocks, and US bonds. By using extremely low expense ratio, tax efficient mutual funds or ETFs, investors tend to do better over the long term.

By using a stock picking adviser who is also charging 90 basis points you might be putting yourself in a worse position over the years.

Best of luck to you, whichever way you decide to proceed.

Regards,
Thank you, retired@50. I am indeed familiar with the philosophy. The part of my IRA that I manage contains VTI & VXUS...which lead me to seek out some bond funds, hence this post. After more research I think I'm probably going to end up with a bond ETF.

I don't like paying the 0.90%, but I also don't want to be penny wise and pound foolish as long as the fund is producing a good yield. All it takes is a phone call to end Fidelity's management.
Let’s be clear on the terminology. Your managed stock portfolio returned 20% in some unspecified time period. The yield on your stocks - which is to say the distribution of dividends or income — is probably more like 1-2% annually or maybe a bit more if they are concentrated in value stocks. The words are commonly interchanged in normal conversation, but since this thread is about bonds and interest rates, I think the distinction is important.

Now, is that 20% you mentioned the annualized return over many years? That would be pretty good, but I’m thinking that’s not the case since you mention the number changes daily. Is it the the past 12 months’ return? If so, that would be pretty awful.
I've had the account since December 2020. I started with $100,000.00. As of today it is at 124,000.00. I apologize if I mixed up the terminology. Dividends get reinvested.
MikeG62
Posts: 3764
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Invest in Separately Managed Bond Account?

Post by MikeG62 »

drummer wrote: Thu Jun 17, 2021 6:45 pm
Doctor Rhythm wrote: Thu Jun 17, 2021 5:18 pm
drummer wrote: Thu Jun 17, 2021 3:53 pm
retired@50 wrote: Thu Jun 17, 2021 3:41 pm
drummer wrote: Thu Jun 17, 2021 3:25 pm

I'm not sure what you want. Today's yield is 19.97%. It fluctuates daily and has been as high as 24%. The fund has close to 100 stocks that they manage.

I'm told that if I wanted to dump the management, the stocks would stay with me and I would manage them. Looking at my activity/history, they do make several trades a week. Most of the stocks pay dividends.

I have about 25 stocks that I manage as part of my IRA. I don't have the time or wherewithal to monitor 100+ additional stocks.
drummer,
You're relatively new here, but in case you hadn't noticed, the Bogleheads.org site is built around the ideas and advice of Jack Bogle.

Are you familiar with stock index funds, and passive investing in general?

Maybe read more about this site's philosophy just to see if any of it resonates with you.
https://www.bogleheads.org/wiki/Boglehe ... philosophy

The very general idea is to hold a broad market portfolio using index funds for US stocks, International stocks, and US bonds. By using extremely low expense ratio, tax efficient mutual funds or ETFs, investors tend to do better over the long term.

By using a stock picking adviser who is also charging 90 basis points you might be putting yourself in a worse position over the years.

Best of luck to you, whichever way you decide to proceed.

Regards,
Thank you, retired@50. I am indeed familiar with the philosophy. The part of my IRA that I manage contains VTI & VXUS...which lead me to seek out some bond funds, hence this post. After more research I think I'm probably going to end up with a bond ETF.

I don't like paying the 0.90%, but I also don't want to be penny wise and pound foolish as long as the fund is producing a good yield. All it takes is a phone call to end Fidelity's management.
Let’s be clear on the terminology. Your managed stock portfolio returned 20% in some unspecified time period. The yield on your stocks - which is to say the distribution of dividends or income — is probably more like 1-2% annually or maybe a bit more if they are concentrated in value stocks. The words are commonly interchanged in normal conversation, but since this thread is about bonds and interest rates, I think the distinction is important.

Now, is that 20% you mentioned the annualized return over many years? That would be pretty good, but I’m thinking that’s not the case since you mention the number changes daily. Is it the the past 12 months’ return? If so, that would be pretty awful.
I've had the account since December 2020. I started with $100,000.00. As of today it is at 124,000.00. I apologize if I mixed up the terminology. Dividends get reinvested.
A 24% return over 6 months is outstanding (that's nearly 50% annualized). I wonder what stocks they are buying that the blended return over 100 stocks would be this high? There cannot be a doubt that this is a very high risk/return situation. If the market corrects, I'd expect the downside move to be as steep as the move has been on the upside.

There is no free lunch in investing. High returns entail greater risk.
Real Knowledge Comes Only From Experience
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Re: Invest in Separately Managed Bond Account?

Post by pkcrafter »

Drummer, just for reference, I am posting this.

Your broker (advisor) is asking you you want to use a separately managed account for bonds. It appears you already have a separately managed account for stocks. So what is a separately managed account?
An SMA is an investment vehicle composed of stocks, bonds and other individual securities that’s overseen by a professional money manager. Unlike some other investment options – like mutual funds – where your money is combined with that of other investors, you directly own the securities within an SMA. Because you own the securities, you have more control over your investments, and there are more options for customization.

Most investment managers work in teams to perform research to provide you with the best recommendations and investment advice, and you’ll get personalized attention to help you meet your financial goals. However, the ability to customize your investments and the added personal attention does come at a premium. SMAs tend to be for individuals with larger amounts of assets to invest, and typically require you to meet high minimum investment levels.
https://www.magnifymoney.com/blog/inves ... gedaccount

You are paying 0.9% for the stock fund, and the bond fund would be 0.3-0.4%. You may also be paying an additional management fee.

Looks like your stock fund is doing fine, but the possibility of you continuing to outperform the reference index is pretty low because of the fees, and using the bond fund is pretty much as waste of money.


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
Topic Author
drummer
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Re: Invest in Separately Managed Bond Account?

Post by drummer »

MikeG62 wrote: Fri Jun 18, 2021 8:41 am
drummer wrote: Thu Jun 17, 2021 6:45 pm
Doctor Rhythm wrote: Thu Jun 17, 2021 5:18 pm
drummer wrote: Thu Jun 17, 2021 3:53 pm
retired@50 wrote: Thu Jun 17, 2021 3:41 pm

drummer,
You're relatively new here, but in case you hadn't noticed, the Bogleheads.org site is built around the ideas and advice of Jack Bogle.

Are you familiar with stock index funds, and passive investing in general?

Maybe read more about this site's philosophy just to see if any of it resonates with you.
https://www.bogleheads.org/wiki/Boglehe ... philosophy

The very general idea is to hold a broad market portfolio using index funds for US stocks, International stocks, and US bonds. By using extremely low expense ratio, tax efficient mutual funds or ETFs, investors tend to do better over the long term.

By using a stock picking adviser who is also charging 90 basis points you might be putting yourself in a worse position over the years.

Best of luck to you, whichever way you decide to proceed.

Regards,
Thank you, retired@50. I am indeed familiar with the philosophy. The part of my IRA that I manage contains VTI & VXUS...which lead me to seek out some bond funds, hence this post. After more research I think I'm probably going to end up with a bond ETF.

I don't like paying the 0.90%, but I also don't want to be penny wise and pound foolish as long as the fund is producing a good yield. All it takes is a phone call to end Fidelity's management.
Let’s be clear on the terminology. Your managed stock portfolio returned 20% in some unspecified time period. The yield on your stocks - which is to say the distribution of dividends or income — is probably more like 1-2% annually or maybe a bit more if they are concentrated in value stocks. The words are commonly interchanged in normal conversation, but since this thread is about bonds and interest rates, I think the distinction is important.

Now, is that 20% you mentioned the annualized return over many years? That would be pretty good, but I’m thinking that’s not the case since you mention the number changes daily. Is it the the past 12 months’ return? If so, that would be pretty awful.
I've had the account since December 2020. I started with $100,000.00. As of today it is at 124,000.00. I apologize if I mixed up the terminology. Dividends get reinvested.
A 24% return over 6 months is outstanding (that's nearly 50% annualized). I wonder what stocks they are buying that the blended return over 100 stocks would be this high? There cannot be a doubt that this is a very high risk/return situation. If the market corrects, I'd expect the downside move to be as steep as the move has been on the upside.

There is no free lunch in investing. High returns entail greater risk.
Indeed, you are correct. Over the last 2 days my return has shrunk to 120,000.00...bummer!
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drummer
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Re: Invest in Separately Managed Bond Account?

Post by drummer »

pkcrafter wrote: Fri Jun 18, 2021 9:52 am Drummer, just for reference, I am posting this.

Your broker (advisor) is asking you you want to use a separately managed account for bonds. It appears you already have a separately managed account for stocks. So what is a separately managed account?
An SMA is an investment vehicle composed of stocks, bonds and other individual securities that’s overseen by a professional money manager. Unlike some other investment options – like mutual funds – where your money is combined with that of other investors, you directly own the securities within an SMA. Because you own the securities, you have more control over your investments, and there are more options for customization.

Most investment managers work in teams to perform research to provide you with the best recommendations and investment advice, and you’ll get personalized attention to help you meet your financial goals. However, the ability to customize your investments and the added personal attention does come at a premium. SMAs tend to be for individuals with larger amounts of assets to invest, and typically require you to meet high minimum investment levels.
https://www.magnifymoney.com/blog/inves ... gedaccount

You are paying 0.9% for the stock fund, and the bond fund would be 0.3-0.4%. You may also be paying an additional management fee.

Looks like your stock fund is doing fine, but the possibility of you continuing to outperform the reference index is pretty low because of the fees, and using the bond fund is pretty much as waste of money.


Paul
Thank you, Paul.

I have ruled out the bond fund...it's not going to happen for me at this point in time. As for the stock fund, I'll monitor the rest of the year and decide if it's worth it.
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Re: Invest in Separately Managed Bond Account?

Post by MikeG62 »

drummer wrote: Fri Jun 18, 2021 3:09 pm
MikeG62 wrote: Fri Jun 18, 2021 8:41 am
drummer wrote: Thu Jun 17, 2021 6:45 pm
Doctor Rhythm wrote: Thu Jun 17, 2021 5:18 pm
drummer wrote: Thu Jun 17, 2021 3:53 pm

Thank you, retired@50. I am indeed familiar with the philosophy. The part of my IRA that I manage contains VTI & VXUS...which lead me to seek out some bond funds, hence this post. After more research I think I'm probably going to end up with a bond ETF.

I don't like paying the 0.90%, but I also don't want to be penny wise and pound foolish as long as the fund is producing a good yield. All it takes is a phone call to end Fidelity's management.
Let’s be clear on the terminology. Your managed stock portfolio returned 20% in some unspecified time period. The yield on your stocks - which is to say the distribution of dividends or income — is probably more like 1-2% annually or maybe a bit more if they are concentrated in value stocks. The words are commonly interchanged in normal conversation, but since this thread is about bonds and interest rates, I think the distinction is important.

Now, is that 20% you mentioned the annualized return over many years? That would be pretty good, but I’m thinking that’s not the case since you mention the number changes daily. Is it the the past 12 months’ return? If so, that would be pretty awful.
I've had the account since December 2020. I started with $100,000.00. As of today it is at 124,000.00. I apologize if I mixed up the terminology. Dividends get reinvested.
A 24% return over 6 months is outstanding (that's nearly 50% annualized). I wonder what stocks they are buying that the blended return over 100 stocks would be this high? There cannot be a doubt that this is a very high risk/return situation. If the market corrects, I'd expect the downside move to be as steep as the move has been on the upside.

There is no free lunch in investing. High returns entail greater risk.
Indeed, you are correct. Over the last 2 days my return has shrunk to 120,000.00...bummer!
You are still up 20% in 6 months! An ~3% pull back in 2 days is not awful.

I still can't imagine what mix of 100 stocks (in an account with only $100,000) would generate this kind of performance. After all, this is on average $1,000 in invested in 100 different companies. Are they using options or some other investments to juice returns? For reference, the S&P 500 is up around 12% YTD.

Is this "Fidelity Federal Equity Income Strategy Account" an SMA or a Mutual Fund available to the general public? I'd be curious to read more on the investment strategy and asset allocation.

The only thing I see that is close in name to the account is this one:

https://www.fidelity.com/bin-public/060 ... -Sheet.pdf

But the YTD return is 7.47% and not the 20% you have enjoyed.
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Re: Invest in Separately Managed Bond Account?

Post by retired@50 »

MikeG62 wrote: Sat Jun 19, 2021 7:34 am
I still can't imagine what mix of 100 stocks (in an account with only $100,000) would generate this kind of performance.

But the YTD return is 7.47% and not the 20% you have enjoyed.
Maybe they are using some small cap stocks.

See Vanguard Tax Managed Small Cap Index. VTMSX up over 22% this year.

Regards,
This is one person's opinion. Nothing more.
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drummer
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Re: Invest in Separately Managed Bond Account?

Post by drummer »

MikeG62 wrote: Sat Jun 19, 2021 7:34 am
drummer wrote: Fri Jun 18, 2021 3:09 pm
MikeG62 wrote: Fri Jun 18, 2021 8:41 am
drummer wrote: Thu Jun 17, 2021 6:45 pm
Doctor Rhythm wrote: Thu Jun 17, 2021 5:18 pm

Let’s be clear on the terminology. Your managed stock portfolio returned 20% in some unspecified time period. The yield on your stocks - which is to say the distribution of dividends or income — is probably more like 1-2% annually or maybe a bit more if they are concentrated in value stocks. The words are commonly interchanged in normal conversation, but since this thread is about bonds and interest rates, I think the distinction is important.

Now, is that 20% you mentioned the annualized return over many years? That would be pretty good, but I’m thinking that’s not the case since you mention the number changes daily. Is it the the past 12 months’ return? If so, that would be pretty awful.
I've had the account since December 2020. I started with $100,000.00. As of today it is at 124,000.00. I apologize if I mixed up the terminology. Dividends get reinvested.
A 24% return over 6 months is outstanding (that's nearly 50% annualized). I wonder what stocks they are buying that the blended return over 100 stocks would be this high? There cannot be a doubt that this is a very high risk/return situation. If the market corrects, I'd expect the downside move to be as steep as the move has been on the upside.

There is no free lunch in investing. High returns entail greater risk.
Indeed, you are correct. Over the last 2 days my return has shrunk to 120,000.00...bummer!
You are still up 20% in 6 months! An ~3% pull back in 2 days is not awful.

I still can't imagine what mix of 100 stocks (in an account with only $100,000) would generate this kind of performance. After all, this is on average $1,000 in invested in 100 different companies. Are they using options or some other investments to juice returns? For reference, the S&P 500 is up around 12% YTD.

Is this "Fidelity Federal Equity Income Strategy Account" an SMA or a Mutual Fund available to the general public? I'd be curious to read more on the investment strategy and asset allocation.

The only thing I see that is close in name to the account is this one:

https://www.fidelity.com/bin-public/060 ... -Sheet.pdf

But the YTD return is 7.47% and not the 20% you have enjoyed.
It is an SMA fund. The link you provide shows a sheet from 2017. Most of the stocks pay a dividend. Here is a list of stocks currently in the fund. Keep in mind that they buy & sell throughout the week.

AAPL APPLE INC
ABBV ABBVIE INC
ABT ABBOTT LABORATORIES
ADI ANALOG DEVICES INC
ALSN ALLISON TRANSMISSION HOLDINGS INC
AMT AMERICAN TOWER CORP
BAC BK OF AMERICA CORP
BAYRY BAYER AG SPON
BDX BECTON DICKINSON &CO
BHP BHP GROUP LTD
BMY BRISTOL-MYERS SQUIBB
BSX BOSTON SCIENTIFIC CORP
BTI BRITISH AMERICAN TOBACCO
BWA BORG WARNER INC
CAH CARDINAL HEALTH INC
CAT CATERPILLAR INC
CB CHUBB LIMITED
CDW CDW CORP
CI CIGNA CORP
CL COLGATE-PALMOLIVE CO
CMCSA COMCAST CORP
CNP CENTERPOINT ENERGY INC
COR CORESITE REALTY CORP
COST COSTCO WHOLESALE CORP
CVS CVS HEALTH CORPORATION
DCI DONALDSON COMPANY INC
DD DUPONT
DEO DIAGEO
DFS DISCOVER FINANCIAL SERVICES
DHR DANAHER CORPORATION
DIS DISNEY WALT CO
DUK DUKE ENERGY CORP
EADSY AIRBUS SE
EDNMY EDENRED
EFX EQUIFAX INC
ETR ENTERGY CORP
EXC EXELON CORP
FCX FREEPORT-MCMORAN INC
FIS FIDELITY NATL INFORMATION SERVICES
G GENPACT LIMITED
GD GENERAL DYNAMICS CORP
GE GENERAL ELECTRIC CO
GSK GLAXOSMITHKLINE
HCSG HEALTHCARE SVCS GROUP INC
HES HESS CORPORATION
HII HUNTINGTON INGALLS INDUSTRIES INC
IBM INTERNATIONAL BUS MACH
IMO IMPERIAL OIL
INTC INTEL CORP
IPG INTERPUBLIC GROUP COS
JCI JOHNSON CONTROLS INTERNATIONAL
JNJ JOHNSON &JOHNSON COM
JPM JPMORGAN CHASE & CO
KDP KEURIG DR PEPPER INC
KO COCA-COLA CO
LLY ELI LILLY AND CO
LOW LOWES COMPANIES INC
LW LAMB WESTON HLDGS INC
MCK MCKESSON CORP
MMC MARSH &MCLENNAN COMPANIES
MMM 3M CO
MO ALTRIA GROUP INC
MS MORGAN STANLEY
MSFT MICROSOFT CORP
NDSN NORDSON CORP
NEE NEXTERA ENERGY INC
NSRGY NESTLE
NTDOY NINTENDO
NTRS NORTHERN TRUST CORP
NXPI NXP SEMICONDUCTORS N V
OTEX OPEN TEXT CORP
PG PROCTER AND GAMBLE CO
PNC PNC FINANCIAL SERVICES GROUP
PSX PHILLIPS 66 COM
QCOM QUALCOMM INC
RTX RAYTHEON TECHNOLOGIES CORP
SAP SAP
SNY SANOFI
SO SOUTHERN CO
SONY SONY GROUP CORPORATION
SPG SIMON PROPERTY GROUP INC
SRE SEMPRA ENERGY
STT STATE STREET CORP
SYY SYSCO CORP
TFC TRUIST FINL CORP COM
TJX TJX COMPANIES INC
TRV TRAVELERS COMPANIES INC
UNH UNITEDHEALTH GROUP INC
UPS UNITED PARCEL SERVICE INC
USB US BANCORP
V VISA INC
VIVHY VIVENDI
VZ VERIZON COMMUNICATIONS INC
WFC WELLS FARGO CO
WHR WHIRLPOOL CORP
WMT WALMART INC
WSO WATSCO INC
XOM EXXON MOBIL CORP
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Re: Invest in Separately Managed Bond Account?

Post by nrkv »

drummer wrote: Sat Jun 19, 2021 4:31 pm
It is an SMA fund. The link you provide shows a sheet from 2017. Most of the stocks pay a dividend. Here is a list of stocks currently in the fund. Keep in mind that they buy & sell throughout the week.

AAPL APPLE INC
ABBV ABBVIE INC
ABT ABBOTT LABORATORIES
ADI ANALOG DEVICES INC
ALSN ALLISON TRANSMISSION HOLDINGS INC
AMT AMERICAN TOWER CORP
BAC BK OF AMERICA CORP
BAYRY BAYER AG SPON
BDX BECTON DICKINSON &CO
BHP BHP GROUP LTD
BMY BRISTOL-MYERS SQUIBB
BSX BOSTON SCIENTIFIC CORP
BTI BRITISH AMERICAN TOBACCO
BWA BORG WARNER INC
CAH CARDINAL HEALTH INC
CAT CATERPILLAR INC
CB CHUBB LIMITED
CDW CDW CORP
CI CIGNA CORP
CL COLGATE-PALMOLIVE CO
CMCSA COMCAST CORP
CNP CENTERPOINT ENERGY INC
COR CORESITE REALTY CORP
COST COSTCO WHOLESALE CORP
CVS CVS HEALTH CORPORATION
DCI DONALDSON COMPANY INC
DD DUPONT
DEO DIAGEO
DFS DISCOVER FINANCIAL SERVICES
DHR DANAHER CORPORATION
DIS DISNEY WALT CO
DUK DUKE ENERGY CORP
EADSY AIRBUS SE
EDNMY EDENRED
EFX EQUIFAX INC
ETR ENTERGY CORP
EXC EXELON CORP
FCX FREEPORT-MCMORAN INC
FIS FIDELITY NATL INFORMATION SERVICES
G GENPACT LIMITED
GD GENERAL DYNAMICS CORP
GE GENERAL ELECTRIC CO
GSK GLAXOSMITHKLINE
HCSG HEALTHCARE SVCS GROUP INC
HES HESS CORPORATION
HII HUNTINGTON INGALLS INDUSTRIES INC
IBM INTERNATIONAL BUS MACH
IMO IMPERIAL OIL
INTC INTEL CORP
IPG INTERPUBLIC GROUP COS
JCI JOHNSON CONTROLS INTERNATIONAL
JNJ JOHNSON &JOHNSON COM
JPM JPMORGAN CHASE & CO
KDP KEURIG DR PEPPER INC
KO COCA-COLA CO
LLY ELI LILLY AND CO
LOW LOWES COMPANIES INC
LW LAMB WESTON HLDGS INC
MCK MCKESSON CORP
MMC MARSH &MCLENNAN COMPANIES
MMM 3M CO
MO ALTRIA GROUP INC
MS MORGAN STANLEY
MSFT MICROSOFT CORP
NDSN NORDSON CORP
NEE NEXTERA ENERGY INC
NSRGY NESTLE
NTDOY NINTENDO
NTRS NORTHERN TRUST CORP
NXPI NXP SEMICONDUCTORS N V
OTEX OPEN TEXT CORP
PG PROCTER AND GAMBLE CO
PNC PNC FINANCIAL SERVICES GROUP
PSX PHILLIPS 66 COM
QCOM QUALCOMM INC
RTX RAYTHEON TECHNOLOGIES CORP
SAP SAP
SNY SANOFI
SO SOUTHERN CO
SONY SONY GROUP CORPORATION
SPG SIMON PROPERTY GROUP INC
SRE SEMPRA ENERGY
STT STATE STREET CORP
SYY SYSCO CORP
TFC TRUIST FINL CORP COM
TJX TJX COMPANIES INC
TRV TRAVELERS COMPANIES INC
UNH UNITEDHEALTH GROUP INC
UPS UNITED PARCEL SERVICE INC
USB US BANCORP
V VISA INC
VIVHY VIVENDI
VZ VERIZON COMMUNICATIONS INC
WFC WELLS FARGO CO
WHR WHIRLPOOL CORP
WMT WALMART INC
WSO WATSCO INC
XOM EXXON MOBIL CORP
I recognize about half of these funds that Schwab management bought me under ThomasPartners. They had their good run and I also paid 0.9% fee. Once I took over from being “managed “, I can’t wait to sell them. I’m only 47 and can’t deal with so many funds. Not sure how one can.
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Re: Invest in Separately Managed Bond Account?

Post by tj »

If you are going to use an SMA, you might as well at least use the tax managed one. It costs less and is a lot more tax efficient:

viewtopic.php?p=4999903#p4999903


The bond SMA's aren't noticeably more pricey than an actively managed bond mutual fund, but with bond yields so low, not sure why one would go for active management. As already mentioned, MYGA's are probably a better option at this time.
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Re: Invest in Separately Managed Bond Account?

Post by skeptical »

drummer wrote: Wed Jun 16, 2021 6:12 pm My broker ( Fidelity) is advising me to get into a Separately Managed Bond Fund that requires a $350,000 minimum with a 0.30-0.40 fee.
Fidelity, for free, will generate a bond ladder for you based on your requirements. you should do this and compare with standard bond funds.

I did this, and asked for two bond ladders, one to beat Vanguard National Muni (VWIUX), the other to beat Vanguard MA Muni (VMATX). It is important to use specific benchmarks. If you are interested in munis, the Vanguard funds are superior to those from Fidelity and Schwab, and many others that I have looked at.

Neither bond ladder was able to match the quality, SEC yield, current yield, yield to maturity, etc of these funds, even before fees, and even counting the fact that the Vanguard fee is baked into their stats. The bond person acknowledged this himself, and offered no explanation other than "they have really good muni funds". You need to be specific in your specs - the percent of pre-refunded, GO, and other aspects are important.

You then need to add the importance of being able to buy/sell specific amounts from a bond fund at your request, something you cannot do with a bond ladder.
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Re: Invest in Separately Managed Bond Account?

Post by bertilak »

JustGotScammed wrote: Thu Jun 17, 2021 4:13 pm
wetgear wrote: Thu Jun 17, 2021 3:16 pm
JustGotScammed wrote: Wed Jun 16, 2021 10:24 pm Dump all the bonds as they won't make you diddly. The only people making real money on bonds these days bought them in the 1990s when rates were much higher and got locked in on favorable terms. Get some stocks under your belt and let that money work for you.
This is terrible advice for a retired person, you trying to scam him?
I don't understand how generally recommending stocks is trying to scam someone, but I would disagree that buying stocks is terrible advice. That's where the real wealth in America has been made. Low-yield bonds lose purchasing power over time, guaranteed.
But is it where wealth and income have been preserved? Retiree's generally do not have new money coming in. If they did the extra risk may be worth the extra (expected, not yet realized) return.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
tj
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Re: Invest in Separately Managed Bond Account?

Post by tj »

bertilak wrote: Mon Jun 21, 2021 10:31 am
JustGotScammed wrote: Thu Jun 17, 2021 4:13 pm
wetgear wrote: Thu Jun 17, 2021 3:16 pm
JustGotScammed wrote: Wed Jun 16, 2021 10:24 pm Dump all the bonds as they won't make you diddly. The only people making real money on bonds these days bought them in the 1990s when rates were much higher and got locked in on favorable terms. Get some stocks under your belt and let that money work for you.
This is terrible advice for a retired person, you trying to scam him?
I don't understand how generally recommending stocks is trying to scam someone, but I would disagree that buying stocks is terrible advice. That's where the real wealth in America has been made. Low-yield bonds lose purchasing power over time, guaranteed.
But is it where wealth and income have been preserved? Retiree's generally do not have new money coming in. If they did the extra risk may be worth the extra (expected, not yet realized) return.
Don't pretty much all retirees have new income coming in, like Social Security?
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Re: Invest in Separately Managed Bond Account?

Post by bertilak »

tj wrote: Mon Jun 21, 2021 5:02 pm
bertilak wrote: Mon Jun 21, 2021 10:31 am
JustGotScammed wrote: Thu Jun 17, 2021 4:13 pm
wetgear wrote: Thu Jun 17, 2021 3:16 pm
JustGotScammed wrote: Wed Jun 16, 2021 10:24 pm Dump all the bonds as they won't make you diddly. The only people making real money on bonds these days bought them in the 1990s when rates were much higher and got locked in on favorable terms. Get some stocks under your belt and let that money work for you.
This is terrible advice for a retired person, you trying to scam him?
I don't understand how generally recommending stocks is trying to scam someone, but I would disagree that buying stocks is terrible advice. That's where the real wealth in America has been made. Low-yield bonds lose purchasing power over time, guaranteed.
But is it where wealth and income have been preserved? Retiree's generally do not have new money coming in. If they did the extra risk may be worth the extra (expected, not yet realized) return.
Don't pretty much all retirees have new income coming in, like Social Security?
Yes, but it is usually just enough (or NOT enough) to cover day-to-day expenses. I should have said no INVESTIBLE income.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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