Using the Total Bond Fund in a rising rate environment

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Turbo29
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Re: Using the Total Bond Fund in a rising rate environment

Post by Turbo29 » Sun Jul 01, 2018 10:19 am

grabiner wrote:
Sun Jul 01, 2018 10:04 am

If you do need a specific number of dollars on a specific date, you can either buy CDs or individual bonds, or shorten your own duration. If you want money in five years, you can start in an intermediate-term bond fund with a five-year duration, then move money to a short-term bond fund and then to a money-market fund over those five years, so that your duration matches the time until the need. This would have the same effect as if you held an individual bond, but would give you the diversification of a bond fund.
What about target maturity date bond funds?

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grabiner
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Re: Using the Total Bond Fund in a rising rate environment

Post by grabiner » Sun Jul 01, 2018 12:22 pm

Turbo29 wrote:
Sun Jul 01, 2018 10:19 am
grabiner wrote:
Sun Jul 01, 2018 10:04 am

If you do need a specific number of dollars on a specific date, you can either buy CDs or individual bonds, or shorten your own duration. If you want money in five years, you can start in an intermediate-term bond fund with a five-year duration, then move money to a short-term bond fund and then to a money-market fund over those five years, so that your duration matches the time until the need. This would have the same effect as if you held an individual bond, but would give you the diversification of a bond fund.
What about target maturity date bond funds?
These would also work, although the cost may not be worth it; usually, you'll be better off buying a CD maturing on the date you need the money. (For longer-term investments, a target-maturity fund or individual bond is actually risky, because of inflation; you probably need not $50,000, but the purchasing power of today's $40,000, ten years from now. Buying individual TIPS or I-Bonds would be the best way to do this.)
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michaeljc70
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Re: Using the Total Bond Fund in a rising rate environment

Post by michaeljc70 » Sun Jul 01, 2018 12:50 pm

johnra wrote:
Sun Jul 01, 2018 1:54 am
grabiner wrote:
Sat Jun 30, 2018 11:31 pm
... because the fund buys and sells bonds. If a bond falls in price, the fund might sell that bond, and buy a new bond with a higher coupon rate at par. The new bond will thus pay more dividends, but will not rise back in price unless rates fall.
Do bond fund managers know that holding a bond to maturity will give them back their original deposit to hold the bond to maturity will give them back their investment?
Of course. But you are looking at it wrong. There are two options:

1) Sell the bond for less than face value and buy a new bond that pays a higher rate (more interest, less principal).
2) Keep the bond until maturity and get face value and less interest for the rest of the duration (less interest, more principal).

jalbert
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Re: Using the Total Bond Fund in a rising rate environment

Post by jalbert » Sun Jul 01, 2018 3:00 pm

A bond index fund may need to sell a bond when its remaining time to maturity is inconsistent with the index being tracked. Short-term, Intermediate-term, and total market indices will only need to sell a bond close enough to maturity that residual principal changes from interest rate changes are going to be small.

In general, the effect of interest rate changes on the total return of a bond fund depends on the rate at which interest rates are changing. A slow steady increase in rates benefits a bond fund over the long run. It benefits shorter duration portfolios sooner than longer duration portfolios, but the longer duration portfolio usually is compensated with a higher yield than the shorter duration portfolio.

The drivers for higher treasury bond interest rates are inflation and the supply and demand for bonds. Higher interest rates make bonds more attractive as an investment, increasing demand. This puts an invisible de facto bound on how fast interest rates for bonds can rise without inflation expectations also rising.

Thus, the major risk for investors in nominal bonds is the inflation rate being higher than expected over the life of the bond. If the plan administrators wanted to provide tools for dealing with the actual risk, they would be providing a TIPS fund. If they wanted to provide a fixed-income investment for risk-averse investors who are not comfortable with the interest rate term risk of a bond fund, they should include a stable-value fund.

Thus, I think a good suite of fixed income investments for a 401K plan would include a stable-value fund, a TIPS fund, and an intermediate-term high quality nominal bond fund.

Taylor pointed out that DODIX had a larger drawdown than a total bond index fund in 2008/2009. That is correct. A total bond index fund did a better job of diversifying equity risk. Taking more credit risk and less term risk increases correlation with equity risk.
Risk is not a guarantor of return.

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Re: Using the Total Bond Fund in a rising rate environment

Post by BrooklynInvest » Mon Jul 02, 2018 6:57 am

That's a pretty specific retort from your administrator. Guess the issues he's raising are sound but certainly fall below the "guarantee" threshold. Suggest something along the lines of -

"Thanks for the financial advice [see what I did there?] You raise some important points. Rather than debate market direction and the likelihood of rate hikes exceeding already-priced in expectations, my key concern is the availability of investment options most likely to benefit participants over the long term.

Bond index funds aren't perfect. But especially in this low rate environment there is no guarantee [ahem] that an active manager will be able to add value high enough to compensate for the compounding of their additional fees. My fellow participants will benefit from the additional choice you, as fiduciary, can provide."

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Re: Using the Total Bond Fund in a rising rate environment

Post by michaeljc70 » Mon Jul 02, 2018 10:15 am

BrooklynInvest wrote:
Mon Jul 02, 2018 6:57 am
That's a pretty specific retort from your administrator. Guess the issues he's raising are sound but certainly fall below the "guarantee" threshold. Suggest something along the lines of -

"Thanks for the financial advice [see what I did there?] You raise some important points. Rather than debate market direction and the likelihood of rate hikes exceeding already-priced in expectations, my key concern is the availability of investment options most likely to benefit participants over the long term.

Bond index funds aren't perfect. But especially in this low rate environment there is no guarantee [ahem] that an active manager will be able to add value high enough to compensate for the compounding of their additional fees. My fellow participants will benefit from the additional choice you, as fiduciary, can provide."
Or ask the administrator if they are going to remove all the equity funds when the market is dropping....(I suppose you could argue the other way too.....stocks are too high....get rid of all the stock funds!)

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Re: Using the Total Bond Fund in a rising rate environment

Post by dbr » Mon Jul 02, 2018 11:41 am

jmsaway wrote:
Fri Jun 29, 2018 10:16 am
After asking my plan administer about adding the Vanguard Total Bond Fund I received the following response..."I would highly recommend against adding a bond index fund to the plan in a rising interest rate environment. While I am a big fan of index funds and one is offered in every other asset class, rising rates will create a principal loss in the underlying value of the bond portfolio. That is an absolute guarantee. A bond index fund will do nothing to shorten the length of the maturities within the portfolio which is the only way to minimize that principal loss. Totally different story in a flat or declining interest rate environment but for the first time in 25+ years we are absolutely in a rising rate environment and a bond index fund is not going to outperform a competent manager that will adjust maturities based on rising rates."

Can anyone offer a counter-argument or is this prudent at this time in the economic cycle. We do have PONAX and DODIX in our 401k investment menu.
Getting back to the context here, is this plan administrator actually in control of what funds are offered or are not? And even if he, or he as a rep of the company he works for, does have input on that, it is not as if these things are decided by an employee making requests from some single administrator or what single opinion that person may hold. I would think what funds are available in the plan would be something you could address with your company management. It would have nothing to do with the points made by this individual.

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Re: Using the Total Bond Fund in a rising rate environment

Post by patrick013 » Mon Jul 02, 2018 12:23 pm

dbr wrote:
Mon Jul 02, 2018 11:41 am
jmsaway wrote:
Fri Jun 29, 2018 10:16 am
After asking my plan administer about adding the Vanguard Total Bond Fund I received the following response..."I would highly recommend against adding a bond index fund to the plan in a rising interest rate environment. While I am a big fan of index funds and one is offered in every other asset class, rising rates will create a principal loss in the underlying value of the bond portfolio. That is an absolute guarantee. A bond index fund will do nothing to shorten the length of the maturities within the portfolio which is the only way to minimize that principal loss. Totally different story in a flat or declining interest rate environment but for the first time in 25+ years we are absolutely in a rising rate environment and a bond index fund is not going to outperform a competent manager that will adjust maturities based on rising rates."

Can anyone offer a counter-argument or is this prudent at this time in the economic cycle. We do have PONAX and DODIX in our 401k investment menu.
Getting back to the context here, is this plan administrator actually in control of what funds are offered or are not? And even if he, or he as a rep of the company he works for, does have input on that, it is not as if these things are decided by an employee making requests from some single administrator or what single opinion that person may hold. I would think what funds are available in the plan would be something you could address with your company management. It would have nothing to do with the points made by this individual.
Sounds like perfectly good advice to me, right out of the
finance book.

"When bonds are expected to have higher interest rates lower bond
maturities, and when bonds are expected to have lower interest
rates lengthen bond maturities. So when the long term trend has
that expectation I'm following this proverb. The trend will be
your friend."
age in bonds, buy-and-hold, 10 year business cycle

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CaliJim
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Re: Using the Total Bond Fund in a rising rate environment

Post by CaliJim » Mon Jul 02, 2018 1:02 pm

I believe the bond market is very very efficient.

If you reduce duration out of fear that interest rates will change in the future in a way that differs from the way the market thinks interest rates will change in the future, you should ask yourself: "Is my crystal ball clearer than the market's crystal ball"?

Let your investment time horizon guide your bond duration decisions.
Take your risk on the equity side, and stick to investment grade or better bonds on the fixed income side.
Tune your overall portfolio risk via asset allocation.

Make your plan and stay the course.
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dbr
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Re: Using the Total Bond Fund in a rising rate environment

Post by dbr » Mon Jul 02, 2018 1:30 pm

patrick013 wrote:
Mon Jul 02, 2018 12:23 pm
dbr wrote:
Mon Jul 02, 2018 11:41 am
jmsaway wrote:
Fri Jun 29, 2018 10:16 am
After asking my plan administer about adding the Vanguard Total Bond Fund I received the following response..."I would highly recommend against adding a bond index fund to the plan in a rising interest rate environment. While I am a big fan of index funds and one is offered in every other asset class, rising rates will create a principal loss in the underlying value of the bond portfolio. That is an absolute guarantee. A bond index fund will do nothing to shorten the length of the maturities within the portfolio which is the only way to minimize that principal loss. Totally different story in a flat or declining interest rate environment but for the first time in 25+ years we are absolutely in a rising rate environment and a bond index fund is not going to outperform a competent manager that will adjust maturities based on rising rates."

Can anyone offer a counter-argument or is this prudent at this time in the economic cycle. We do have PONAX and DODIX in our 401k investment menu.
Getting back to the context here, is this plan administrator actually in control of what funds are offered or are not? And even if he, or he as a rep of the company he works for, does have input on that, it is not as if these things are decided by an employee making requests from some single administrator or what single opinion that person may hold. I would think what funds are available in the plan would be something you could address with your company management. It would have nothing to do with the points made by this individual.
Sounds like perfectly good advice to me, right out of the
finance book.

"When bonds are expected to have higher interest rates lower bond
maturities, and when bonds are expected to have lower interest
rates lengthen bond maturities. So when the long term trend has
that expectation I'm following this proverb. The trend will be
your friend."
I got the understanding from reading the OP that the issue is what funds are available in the program rather than what advice some guy might give the employee then used as an excuse to evade a legitimate request regarding what funds might be made available.

Also, a lot of investors would prefer to hold a range of maturities and not make changes based on trying to figure out what is expected of interest rates.

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Re: Using the Total Bond Fund in a rising rate environment

Post by Mardoc01 » Mon Jul 02, 2018 2:06 pm

CaliJim wrote:
Mon Jul 02, 2018 1:02 pm
I believe the bond market is very very efficient.

If you reduce duration out of fear that interest rates will change in the future in a way that differs from the way the market thinks interest rates will change in the future, you should ask yourself: "Is my crystal ball clearer than the market's crystal ball"?

Let your investment time horizon guide your bond duration decisions.
Take your risk on the equity side, and stick to investment grade or better bonds on the fixed income side.
Tune your overall portfolio risk via asset allocation.

Make your plan and stay the course.
this exactly +1

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patrick013
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Re: Using the Total Bond Fund in a rising rate environment

Post by patrick013 » Mon Jul 02, 2018 3:51 pm

dbr wrote:
Mon Jul 02, 2018 1:30 pm
Also, a lot of investors would prefer to hold a range of maturities and not make changes based on trying to figure out what is expected of interest rates.
Well it's not hard. Choices between short and long term. Being a Fed
watcher sometimes you get forecasts and other times you get policy
statements. You get imperfect or perfect information. That's the risk
of information. Have to wait and see what happens the next several
years.

I think bond funds are going to get clobbered. Yields on short term may
rise 1% and only .5% on longer terms. The difference in duration yield
and term may be slight then but getting the peak rate long term will likely
need a target date maturity. So the choice is there to take or leave.

The plan administrator is not getting a fee just talking.......so I don't think
his opinion is more than to be considered an opinion, to leave or take.
age in bonds, buy-and-hold, 10 year business cycle

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Re: Using the Total Bond Fund in a rising rate environment

Post by CaliJim » Tue Jul 03, 2018 11:30 pm

Mardoc01 wrote:
Mon Jul 02, 2018 2:06 pm
CaliJim wrote:
Mon Jul 02, 2018 1:02 pm
I believe the bond market is very very efficient.

If you reduce duration out of fear that interest rates will change in the future in a way that differs from the way the market thinks interest rates will change in the future, you should ask yourself: "Is my crystal ball clearer than the market's crystal ball"?

Let your investment time horizon guide your bond duration decisions.
Take your risk on the equity side, and stick to investment grade or better bonds on the fixed income side.
Tune your overall portfolio risk via asset allocation.

Make your plan and stay the course.
this exactly +1
Thanks MarDoc. Always good to hear I've posted something that at least one other person agrees with. :)

And I wanted to add a caveat to "Let your investment time horizon guide your bond duration decisions. " which is this:

individuals should probably not get too into Long Term Bonds (unless you really know what your doing; ie. certain types of barbell portfolios.)

Save LT Bond Funds and longer average duration for the endowment funds and other entities who have longer time horizons than we do.

Individuals are heavily exposed to accident, health, job (income stability) and stock market beta risks. Keeping average duration under 10 years is probably a good thing ... it will help smooth things out if one unexpectedly needs to start drawing down the portfolio during a stock market crash.
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vineviz
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Re: Using the Total Bond Fund in a rising rate environment

Post by vineviz » Tue Jul 03, 2018 11:40 pm

CaliJim wrote:
Tue Jul 03, 2018 11:30 pm
And I wanted to add a caveat to "Let your investment time horizon guide your bond duration decisions. " which is this:

individuals should probably not get too into Long Term Bonds (unless you really know what your doing; ie. certain types of barbell portfolios.)

Save LT Bond Funds and longer average duration for the endowment funds and other entities who have longer time horizons than we do.
Assuming that the investor is putting their emergency funds where they belong (i.e. a riskless asset like cash accounts or money market funds), long-term bond funds can be a perfectly reasonable choice for the bond portion of a retirement portfolio.

A 28 year-old investor has a life expectancy of 82 to 86 years, according to most actuarial tables. That's an investment horizon of 55 to 60 years, so investing the entire bond portion of their retirement portfolio in a bond fund with an average duration of 20 to 30 years (e.g. Vanguard Long-Term Treasury ETF (VGLT)) is not only appropriate but probably optimal.

They'd probably want to begin shortening their average duration once they hit their 50s or thereabouts (keeping bond duration at no more than 75% of their remaining life expectancy), but shortening earlier is probably irrational.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Using the Total Bond Fund in a rising rate environment

Post by CaliJim » Wed Jul 04, 2018 12:07 am

vineviz wrote:
Tue Jul 03, 2018 11:40 pm
CaliJim wrote:
Tue Jul 03, 2018 11:30 pm
And I wanted to add a caveat to "Let your investment time horizon guide your bond duration decisions. " which is this:

individuals should probably not get too into Long Term Bonds (unless you really know what your doing; ie. certain types of barbell portfolios.)
A 28 year-old investor has a life expectancy of 82 to 86 years, according to most actuarial tables. That's an investment horizon of 55 to 60 years, so investing the entire bond portion of their retirement portfolio in a bond fund with an average duration of 20 to 30 years (e.g. Vanguard Long-Term Treasury ETF (VGLT)) is not only appropriate but probably optimal.
Yes... "can be reasonable" in some situations. But I'll have agree to disagree w/ you in general. I think it is risky for most individuals. Go in with eyes wide open. Know your risk tolerance. The risk of behavioral mistakes is high with LT Bonds.

Also, when a recession or depression turns into stagflation, AND you lose your job, AND maybe lose your health too, all at the same time, and say you are mid 30's or 40's, of modest means...... having a big chunk in 30 year bonds can be a real b*tch. Stock principle in the tank. Bond principle in the tank. Limited prospects for earned income. Ugh. Even a 1 year emergency fund might not be big enough. Individuals have risks that institutions don't. Call me "more conservative than you".
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vineviz
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Re: Using the Total Bond Fund in a rising rate environment

Post by vineviz » Wed Jul 04, 2018 12:13 am

CaliJim wrote:
Wed Jul 04, 2018 12:07 am
I'll agree to disagree w/ you on that one. When a recession turns into a stagflation and the 30 year old looses his job while interest rates are rising through the roof... having a big chunk in 30 year bonds can be a real b*tch.
My guess is that the yield spread between an intermediate bond fund and a long term bond fund will the least of the worries facing this hypothetical homeless unemployed 30 year old.

Seriously, there really isn't period in history where having 10% or 20% in long term bonds was significantly worse than having that same amount in intermediate bonds. And there have been several periods where is was significantly better (higher returns and lower volatility).
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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CaliJim
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Re: Using the Total Bond Fund in a rising rate environment

Post by CaliJim » Wed Jul 04, 2018 12:24 am

If we are talking only 10% or 20% in bonds... ok sure. Hardly a blip. I was assuming age in bonds.
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Re: Using the Total Bond Fund in a rising rate environment

Post by ruralavalon » Wed Jul 04, 2018 7:55 am

vineviz wrote:
Tue Jul 03, 2018 11:40 pm
CaliJim wrote:
Tue Jul 03, 2018 11:30 pm
And I wanted to add a caveat to "Let your investment time horizon guide your bond duration decisions. " which is this:

individuals should probably not get too into Long Term Bonds (unless you really know what your doing; ie. certain types of barbell portfolios.)

Save LT Bond Funds and longer average duration for the endowment funds and other entities who have longer time horizons than we do.
Assuming that the investor is putting their emergency funds where they belong (i.e. a riskless asset like cash accounts or money market funds), long-term bond funds can be a perfectly reasonable choice for the bond portion of a retirement portfolio.

A 28 year-old investor has a life expectancy of 82 to 86 years [emphasis added], according to most actuarial tables. That's an investment horizon of 55 to 60 years, so investing the entire bond portion of their retirement portfolio in a bond fund with an average duration of 20 to 30 years (e.g. Vanguard Long-Term Treasury ETF (VGLT)) is not only appropriate but probably optimal.

They'd probably want to begin shortening their average duration once they hit their 50s or thereabouts (keeping bond duration at no more than 75% of their remaining life expectancy), but shortening earlier is probably irrational.
For a 28 year old, life expectancy is more like 50 - 54 years.
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Re: Using the Total Bond Fund in a rising rate environment

Post by vineviz » Wed Jul 04, 2018 9:32 am

ruralavalon wrote:
Wed Jul 04, 2018 7:55 am
vineviz wrote:
Tue Jul 03, 2018 11:40 pm
A 28 year-old investor has a life expectancy of 82 to 86 years [emphasis added], according to most actuarial tables. That's an investment horizon of 55 to 60 years, so investing the entire bond portion of their retirement portfolio in a bond fund with an average duration of 20 to 30 years (e.g. Vanguard Long-Term Treasury ETF (VGLT)) is not only appropriate but probably optimal.

They'd probably want to begin shortening their average duration once they hit their 50s or thereabouts (keeping bond duration at no more than 75% of their remaining life expectancy), but shortening earlier is probably irrational.
For a 28 year old, life expectancy is more like 50 - 54 years.
I was quoting their total life expectancy at age 28, and I should have said so.

50-54 years would indeed be their additional life expectancy and, therefore, a central estimate of their investment horizon.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Using the Total Bond Fund in a rising rate environment

Post by Mardoc01 » Wed Jul 04, 2018 9:16 pm

CaliJim wrote:
Tue Jul 03, 2018 11:30 pm
Mardoc01 wrote:
Mon Jul 02, 2018 2:06 pm
CaliJim wrote:
Mon Jul 02, 2018 1:02 pm
I believe the bond market is very very efficient.

If you reduce duration out of fear that interest rates will change in the future in a way that differs from the way the market thinks interest rates will change in the future, you should ask yourself: "Is my crystal ball clearer than the market's crystal ball"?

Let your investment time horizon guide your bond duration decisions.
Take your risk on the equity side, and stick to investment grade or better bonds on the fixed income side.
Tune your overall portfolio risk via asset allocation.

Make your plan and stay the course.
this exactly +1
Thanks MarDoc. Always good to hear I've posted something that at least one other person agrees with. :)

And I wanted to add a caveat to "Let your investment time horizon guide your bond duration decisions. " which is this:

individuals should probably not get too into Long Term Bonds (unless you really know what your doing; ie. certain types of barbell portfolios.)

Save LT Bond Funds and longer average duration for the endowment funds and other entities who have longer time horizons than we do.

Individuals are heavily exposed to accident, health, job (income stability) and stock market beta risks. Keeping average duration under 10 years is probably a good thing ... it will help smooth things out if one unexpectedly needs to start drawing down the portfolio during a stock market crash.
What about a shift to short term tips today for - a 76 y/o. Do u think inflation protection is prudent at this juncture ? And yes I realize this is somewhat " market timing "

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Re: Using the Total Bond Fund in a rising rate environment

Post by CaliJim » Thu Jul 05, 2018 12:25 pm

Mardoc01 wrote:
Wed Jul 04, 2018 9:16 pm
CaliJim wrote:
Tue Jul 03, 2018 11:30 pm
Mardoc01 wrote:
Mon Jul 02, 2018 2:06 pm
CaliJim wrote:
Mon Jul 02, 2018 1:02 pm
I believe the bond market is very very efficient.

If you reduce duration out of fear that interest rates will change in the future in a way that differs from the way the market thinks interest rates will change in the future, you should ask yourself: "Is my crystal ball clearer than the market's crystal ball"?

Let your investment time horizon guide your bond duration decisions.
Take your risk on the equity side, and stick to investment grade or better bonds on the fixed income side.
Tune your overall portfolio risk via asset allocation.

Make your plan and stay the course.
this exactly +1
Thanks MarDoc. Always good to hear I've posted something that at least one other person agrees with. :)

And I wanted to add a caveat to "Let your investment time horizon guide your bond duration decisions. " which is this:

individuals should probably not get too into Long Term Bonds (unless you really know what your doing; ie. certain types of barbell portfolios.)

Save LT Bond Funds and longer average duration for the endowment funds and other entities who have longer time horizons than we do.

Individuals are heavily exposed to accident, health, job (income stability) and stock market beta risks. Keeping average duration under 10 years is probably a good thing ... it will help smooth things out if one unexpectedly needs to start drawing down the portfolio during a stock market crash.
What about a shift to short term tips today for - a 76 y/o. Do u think inflation protection is prudent at this juncture ? And yes I realize this is somewhat " market timing "
Unexpected high inflation is a "black swan". Pretty low probability... but high impact. Having a small slice of short term tips might help I guess. It wouldn't be a huge mistake to have some. But a small slice isn't really a lot of insurance. Groks tips ladder is better. But it takes a fair amount of work to implement.

There was a thread a while back, started by Sheepdog if I recall correctly, that spoke to the merit of having a larger "emergency fund" when in the withdrawal phase. After reading that thread, I put a years worth of spending in a short term tips fund, and another year's worth of sending in a short term bond fund. In retrospect, I don't know if it is any better or worse than the simplicity of a conservatively tilted (ie. age in bonds) three fund portfolio. But it satisfied my itch to "do something". Short term bond NAVs took a dive as soon as I did this though. LOL


They say that folks who don't tinker with their plans get better results than those of us who are continually trying to improve their positions.
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Re: Using the Total Bond Fund in a rising rate environment

Post by patrick013 » Thu Jul 05, 2018 1:59 pm

Image

There'll be a time to go long term tho we may never see these
rates again. Inflation ? I keep thinking what if gas was $5-$6
per gallon. That would certainly spike the inflation rate.

MHO
age in bonds, buy-and-hold, 10 year business cycle

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Re: Using the Total Bond Fund in a rising rate environment

Post by CaliJim » Fri Jul 06, 2018 10:30 am

patrick013 wrote:
Thu Jul 05, 2018 1:59 pm
There'll be a time to go long term tho we may never see these rates again.
When LT rates hit 15%, who is to say they won't go full Zimbabwe or Venezuela on us?

(I wish I had backed up the truck and bought 30 year bonds at 15! in 1985, but I didn't have a truck then, and the money I did I lost picking the wrong sector funds!)

Anyway..... successful market timing is HARD.

Diversify broadly. Avoid market timing. Keep average bond duration moderate. Stay the course.
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