Why not 100% PSLDX?

[vijaym73]

And ??

[guyinlaw]

Jason Zweig about ProShares UltraPro QQQ

Few funds in history can rival the returns of ProShares UltraPro QQQ, a $7 billion exchange-traded fund that seeks to triple the daily performance of the Nasdaq 100 index.

Starting from 2000 to now TQQQ is probably still under water. (if TQQQ existed back then, someone might have simulated it)

[jarjarM]

Jason Zweig about ProShares UltraPro QQQ

Few funds in history can rival the returns of ProShares UltraPro QQQ, a $7 billion exchange-traded fund that seeks to triple the daily performance of the Nasdaq 100 index.

Starting from 2000 to now TQQQ is probably still under water. (if TQQQ existed back then, someone might have simulated it)

It is, I simulated UPRO going back that far and UPRO finally recovered to 2000 level sometime around 2017, QQQ drawdown was more significant than SP500.

[InvestInPasta]

And ??

Just some food for thought on the extreme danger of leverage.

[DesertMan]

Jason Zweig about ProShares UltraPro QQQ

Few funds in history can rival the returns of ProShares UltraPro QQQ, a $7 billion exchange-traded fund that seeks to triple the daily performance of the Nasdaq 100 index.

TQQQ vs PSLDX is apples to oranges. TQQQ, like the other 3x leveraged ETFs, uses futures to track daily price movement and not total return. These ETFs do a decent job of meeting that objective, which gives them some use in risk parity and hedging. But they are not at all equivalent to funds which use leverage to invest in conventional assets like PSLDX or NTSX.

[Ramjet]

Any PSLDX holders getting nervous about inflation?

https://focuswashington.com/2020/08/25/ ... inflation/

[moptop]

Any PSLDX holders getting nervous about inflation?

https://focuswashington.com/2020/08/25/ ... inflation/

I know it is heresy around these parts, but if inflation becomes a problem, it is easy enough to sell my psldx and get back into total market or whatever else you like. I think that is a more longterm minded and predictable market timing.

[UpsetRaptor]

Small-to-moderate inflation over a few years, like what it would take to haul the average up to 2%, I'm not concerned about. The bond component might drag returns down some, but I'm not expecting PSLDX to perform like it has the last decade anyways. It's large, unexpected inflation that's the boogeyman.

[guyinlaw]

Fed has been trying to spark inflation for many years. It has not been very successful. Now it is targeting 2-3% inflation.

If this affects bond prices and PSLDX, if at all, will be two step process
1. Inflation has to go beyond the target Fed has set.
2. Fed has to increase interest rate in response to it.

This is unlikely to happen. Fed has said it will keep interest rates at zero till end of 2022. Traders expect this to be much longer. Fed has said it will let inflation increase, if it does happen. In the mean time they continue to buy 10Y and 30Y treasuries, corporate debt and MBS, into infinite QE.

LT interest rates had dropped substantially over the last 3 months. 10Y rates to 0.5% and 30Y to 1.3%. Now, traders are speculating and LT rates have increased a bit. Two reasons in news 1. Fed not wanting to do Yield curve control (more directly control LT rates) 2. Possible inflation.

Yes, Cost of goods are up a bit. Due to supply change issues, changed demand, USD devaluation... But as pandemic ends - technology, China and competition will bring the costs back down.

IMO this is temp speculation, while long term interest rate will stay low and go lower. Not worried for > 5 years.

[DesertMan]

FYI, Chase JPMorgan YouInvest has PSPAX (the Class A of the regular, not long duration, version of PSLDX.) It is available load waived with no minimum.

[rascott]

FYI, Chase JPMorgan YouInvest has PSPAX (the Class A of the regular, not long duration, version of PSLDX.) It is available load waived with no minimum.

It's not really a worthwhile fund.

[AZAttorney11]

Fed has been trying to spark inflation for many years. It has not been very successful. Now it is targeting 2-3% inflation.

If this affects bond prices and PSLDX, if at all, will be two step process
1. Inflation has to go beyond the target Fed has set.
2. Fed has to increase interest rate in response to it.

This is unlikely to happen. Fed has said it will keep interest rates at zero till end of 2022. Traders expect this to be much longer. Fed has said it will let inflation increase, if it does happen. In the mean time they continue to buy 10Y and 30Y treasuries, corporate debt and MBS, into infinite QE.

LT interest rates had dropped substantially over the last 3 months. 10Y rates to 0.5% and 30Y to 1.3%. Now, traders are speculating and LT rates have increased a bit. Two reasons in news 1. Fed not wanting to do Yield curve control (more directly control LT rates) 2. Possible inflation.

Yes, Cost of goods are up a bit. Due to supply change issues, changed demand, USD devaluation... But as pandemic ends - technology, China and competition will bring the costs back down.

IMO this is temp speculation, while long term interest rate will stay low and go lower. Not worried for > 5 years.

This.

That said, I have a decent chunk of PSLDX in my portfolio, but it's unlikely I'll add more than $50,000 to my current stake over the next year or two. I'm planning on holding "forever," but in no case for less than 30 years. I'm excited about its prospects for the next three+ decades, but if long bonds, the expense ratio, and cost of leverage under performs, it won't be the end of the world for me.

[mav12]

Fed has been trying to spark inflation for many years. It has not been very successful. Now it is targeting 2-3% inflation.

If this affects bond prices and PSLDX, if at all, will be two step process
1. Inflation has to go beyond the target Fed has set.
2. Fed has to increase interest rate in response to it.

This is unlikely to happen. Fed has said it will keep interest rates at zero till end of 2022. Traders expect this to be much longer. Fed has said it will let inflation increase, if it does happen. In the mean time they continue to buy 10Y and 30Y treasuries, corporate debt and MBS, into infinite QE.

LT interest rates had dropped substantially over the last 3 months. 10Y rates to 0.5% and 30Y to 1.3%. Now, traders are speculating and LT rates have increased a bit. Two reasons in news 1. Fed not wanting to do Yield curve control (more directly control LT rates) 2. Possible inflation.

Yes, Cost of goods are up a bit. Due to supply change issues, changed demand, USD devaluation... But as pandemic ends - technology, China and competition will bring the costs back down.

IMO this is temp speculation, while long term interest rate will stay low and go lower. Not worried for > 5 years.

This.

That said, I have a decent chunk of PSLDX in my portfolio, but it's unlikely I'll add more than $50,000 to my current stake over the next year or two. I'm planning on holding "forever," but in no case for less than 30 years. I'm excited about its prospects for the next three+ decades, but if long bonds, the expense ratio, and cost of leverage under performs, it won't be the end of the world for me.

How does one invest in it w/ < $1 Mill ?

[Semantics]

Fed has been trying to spark inflation for many years. It has not been very successful. Now it is targeting 2-3% inflation.

If this affects bond prices and PSLDX, if at all, will be two step process
1. Inflation has to go beyond the target Fed has set.
2. Fed has to increase interest rate in response to it.

This is unlikely to happen. Fed has said it will keep interest rates at zero till end of 2022. Traders expect this to be much longer. Fed has said it will let inflation increase, if it does happen. In the mean time they continue to buy 10Y and 30Y treasuries, corporate debt and MBS, into infinite QE.

LT interest rates had dropped substantially over the last 3 months. 10Y rates to 0.5% and 30Y to 1.3%. Now, traders are speculating and LT rates have increased a bit. Two reasons in news 1. Fed not wanting to do Yield curve control (more directly control LT rates) 2. Possible inflation.

Yes, Cost of goods are up a bit. Due to supply change issues, changed demand, USD devaluation... But as pandemic ends - technology, China and competition will bring the costs back down.

IMO this is temp speculation, while long term interest rate will stay low and go lower. Not worried for > 5 years.

This.

That said, I have a decent chunk of PSLDX in my portfolio, but it's unlikely I'll add more than $50,000 to my current stake over the next year or two. I'm planning on holding "forever," but in no case for less than 30 years. I'm excited about its prospects for the next three+ decades, but if long bonds, the expense ratio, and cost of leverage under performs, it won't be the end of the world for me.

How does one invest in it w/ < $1 Mill ?

Use a different brokerage. At Vanguard the minimum is $25k, I think, and there's a $8 commission per transaction. At Schwab the minimum is $2500 or $1000 in an IRA.

Re: interest rates, +1 to guyinlaw's post. I'm personally not worried about treasury rates spiking up, but I do think it's likely that this fund will only slightly outperform $SPX going forward, which still amounts to a lot compounded over 30 years, but won't be like the past ten. So I'm probably going to move my holdings to something more HEDGEFUNDIE-ish.

[hunoraut]

Last I checked -- which wasnt long -- Schwab had minimum of 100k. Fidelity had no minimum that I could discern

[guyinlaw]

Last I checked -- which wasnt long -- Schwab had minimum of 100k. Fidelity had no minimum that I could discern

I have this at Schwab. It requires < 5k minimum, with $50 transaction fee

[hunoraut]

I have this at Schwab. It requires < 5k minimum, with $50 transaction fee

You're right. Just checked again and it's 2.5k. Very nice

[Ramjet]

Fed has been trying to spark inflation for many years. It has not been very successful. Now it is targeting 2-3% inflation.

If this affects bond prices and PSLDX, if at all, will be two step process
1. Inflation has to go beyond the target Fed has set.
2. Fed has to increase interest rate in response to it.

This is unlikely to happen. Fed has said it will keep interest rates at zero till end of 2022. Traders expect this to be much longer. Fed has said it will let inflation increase, if it does happen. In the mean time they continue to buy 10Y and 30Y treasuries, corporate debt and MBS, into infinite QE.

LT interest rates had dropped substantially over the last 3 months. 10Y rates to 0.5% and 30Y to 1.3%. Now, traders are speculating and LT rates have increased a bit. Two reasons in news 1. Fed not wanting to do Yield curve control (more directly control LT rates) 2. Possible inflation.

Yes, Cost of goods are up a bit. Due to supply change issues, changed demand, USD devaluation... But as pandemic ends - technology, China and competition will bring the costs back down.

IMO this is temp speculation, while long term interest rate will stay low and go lower. Not worried for > 5 years.

This.

That said, I have a decent chunk of PSLDX in my portfolio, but it's unlikely I'll add more than $50,000 to my current stake over the next year or two. I'm planning on holding "forever," but in no case for less than 30 years. I'm excited about its prospects for the next three+ decades, but if long bonds, the expense ratio, and cost of leverage under performs, it won't be the end of the world for me.

How does one invest in it w/ < $1 Mill ?

TD Ameritrade has it for $50 per trade

[isubrama]

Fed has been trying to spark inflation for many years. It has not been very successful. Now it is targeting 2-3% inflation.

If this affects bond prices and PSLDX, if at all, will be two step process
1. Inflation has to go beyond the target Fed has set.
2. Fed has to increase interest rate in response to it.

This is unlikely to happen. Fed has said it will keep interest rates at zero till end of 2022. Traders expect this to be much longer. Fed has said it will let inflation increase, if it does happen. In the mean time they continue to buy 10Y and 30Y treasuries, corporate debt and MBS, into infinite QE.

LT interest rates had dropped substantially over the last 3 months. 10Y rates to 0.5% and 30Y to 1.3%. Now, traders are speculating and LT rates have increased a bit. Two reasons in news 1. Fed not wanting to do Yield curve control (more directly control LT rates) 2. Possible inflation.

Yes, Cost of goods are up a bit. Due to supply change issues, changed demand, USD devaluation... But as pandemic ends - technology, China and competition will bring the costs back down.

IMO this is temp speculation, while long term interest rate will stay low and go lower. Not worried for > 5 years.

This.

That said, I have a decent chunk of PSLDX in my portfolio, but it's unlikely I'll add more than $50,000 to my current stake over the next year or two. I'm planning on holding "forever," but in no case for less than 30 years. I'm excited about its prospects for the next three+ decades, but if long bonds, the expense ratio, and cost of leverage under performs, it won't be the end of the world for me.

How does one invest in it w/ < $1 Mill ?

TD Ameritrade has it for $50 per trade

Ally has it for $10 fee, for $500 or so minimum.

[DesertMan]

FYI, Chase JPMorgan YouInvest has PSPAX (the Class A of the regular, not long duration, version of PSLDX.) It is available load waived with no minimum.

It looks like PSLDX itself is also available on the same terms... no minimum and no load.

[M1garand30064]

Fed has been trying to spark inflation for many years. It has not been very successful. Now it is targeting 2-3% inflation.

If this affects bond prices and PSLDX, if at all, will be two step process
1. Inflation has to go beyond the target Fed has set.
2. Fed has to increase interest rate in response to it.

This is unlikely to happen. Fed has said it will keep interest rates at zero till end of 2022. Traders expect this to be much longer. Fed has said it will let inflation increase, if it does happen. In the mean time they continue to buy 10Y and 30Y treasuries, corporate debt and MBS, into infinite QE.

LT interest rates had dropped substantially over the last 3 months. 10Y rates to 0.5% and 30Y to 1.3%. Now, traders are speculating and LT rates have increased a bit. Two reasons in news 1. Fed not wanting to do Yield curve control (more directly control LT rates) 2. Possible inflation.

Yes, Cost of goods are up a bit. Due to supply change issues, changed demand, USD devaluation... But as pandemic ends - technology, China and competition will bring the costs back down.

IMO this is temp speculation, while long term interest rate will stay low and go lower. Not worried for > 5 years.

This.

That said, I have a decent chunk of PSLDX in my portfolio, but it's unlikely I'll add more than $50,000 to my current stake over the next year or two. I'm planning on holding "forever," but in no case for less than 30 years. I'm excited about its prospects for the next three+ decades, but if long bonds, the expense ratio, and cost of leverage under performs, it won't be the end of the world for me.

How does one invest in it w/ < $1 Mill ?

TD Ameritrade has it for $50 per trade

I bought it in my HSA with TD last week for a $25 fee. If you set up a recurring transaction it is free after the initial purchase.

[MindBogler]

How are you all accounting for the percentage of bonds / stocks that PSLDX contributes as a component in your overall asset allocation?

[grp2c]

How are you all accounting for the percentage of bonds / stocks that PSLDX contributes as a component in your overall asset allocation?

I would like to know as well. I think someone said they just count it as 100% US stocks.

[ChrisBenn]

I think the most correct would be to add a negative cash position to your allocation (which would then also give you an idea of overall portfolio leverage).

I think treating it notionally as 100% S&P 500 would be more correct than treating it as a 50/50.

[MindBogler]

I think the most correct would be to add a negative cash position to your allocation (which would then also give you an idea of overall portfolio leverage).

I think treating it notionally as 100% S&P 500 would be more correct than treating it as a 50/50.

50/50 is what I have been using for a "close enough" approximation. Granted the components behave differently than normal because of leverage. I'm just curious what others are doing, maybe there is a better method.

[Ramjet]

How are you all accounting for the percentage of bonds / stocks that PSLDX contributes as a component in your overall asset allocation?

100% U.S. Equity

[jarjarM]

Another vote for 100% stock.

[codoriti]

Hopped on the train in May, but I guess these last 2 days is the feeling people have been getting over the past decade with this fund. Hopefully it lasts, at least to some degree

[rchmx1]

Hopped on the train in May, but I guess these last 2 days is the feeling people have been getting over the past decade with this fund. Hopefully it lasts, at least to some degree

Exact same boat. Days where both stocks and bonds are up sure do make up for those day where both are down.

[chillpenguin]

How are you all accounting for the percentage of bonds / stocks that PSLDX contributes as a component in your overall asset allocation?

I thought it was considered 100/100?

I think considering it 100/100 would be the most honest because it forces you to confront the built-in leverage. Pretending it is 50/50 would allow you to "forget" about the inherent risk/return characteristics.

100/0 would definitely be closer to the truth, but once again that doesn't account for the full story. For example, a crash in both stocks and bonds at the same time would effect the 100/100 allocation doubly, compared to the 100/0.

I could be wrong about the exact numbers because I don't know that much about this fund specifically. But hopefully you can see my point though about how leverage effects the asset allocation breakdown.

[chillpenguin]

Regarding recreating PSLDX with ETFs, I have another version to offer:

66% NTSX
14% UPRO
20% TMF

The stock/bond allocation is effectively 101/100 (to be precise, I calculated 101.4 stocks, 99.6 bonds).

One thing I like about this is that it minimizes the use of the leveraged-daily etfs, and moves more of the leverage into NTSX which is supposedly more efficient and less susceptible to volatility decay.

Feel free to tweak further and offer improvements!

[firebirdparts]

How are you all accounting for the percentage of bonds / stocks that PSLDX contributes as a component in your overall asset allocation?

100% stock.

Buy a big pile of it and watch it move a while, and you'll agree.

[Rad Dad]

Regarding recreating PSLDX with ETFs, I have another version to offer:

66% NTSX
14% UPRO
20% TMF

The stock/bond allocation is effectively 101/100 (to be precise, I calculated 101.4 stocks, 99.6 bonds).

One thing I like about this is that it minimizes the use of the leveraged-daily etfs, and moves more of the leverage into NTSX which is supposedly more efficient and less susceptible to volatility decay.

Feel free to tweak further and offer improvements!

I am also doing something very similar to this.

[MindBogler]

How are you all accounting for the percentage of bonds / stocks that PSLDX contributes as a component in your overall asset allocation?

100% stock.

Buy a big pile of it and watch it move a while, and you'll agree.

I guess I have a problem with this characterization because it isn't 100% stock. The most accurate way to describe it--I believe and, as others have mentioned--is 100% stock and 100% bond with a negative cash position. However, I'm not sure it is even useful to account for the negative cash / leverage when assessing what percentage of stock/bond this fund represents in an overall asset allocation. Although this fund responds to those assets with greater magnitude, it still approximates a combination of both stock/bond. That is why I have been using 50/50. I'd love to hear the rationale behind accounting for it in different ways.

Oh, and I already do have a pretty big pile.

[redstar]

[quote=firebirdparts post_id=5474249 time=<a href="tel:1599146865">1599146865</a> user_id=149308]
[quote=MindBogler post_id=5463675 time=<a href="tel:1598724644">1598724644</a> user_id=44330]
How are you all accounting for the percentage of bonds / stocks that PSLDX contributes as a component in your overall asset allocation?

100% stock.

Buy a big pile of it and watch it move a while, and you'll agree.
[/quote]
I guess I have a problem with this characterization because it isn't 100% stock. The most accurate way to describe it--I believe and, as others have mentioned--is 100% stock and 100% bond with a negative cash position. However, I'm not sure it is even useful to account for the negative cash / leverage when assessing what percentage of stock/bond this fund represents in an overall asset allocation. Although this fund responds to those assets with greater magnitude, it still approximates a combination of both stock/bond. That is why I have been using 50/50. I'd love to hear the rationale behind accounting for it in different ways.

Oh, and I already do have a pretty big pile.

[/quote]

I think it depends on the purpose of the accounting exercise. When I am looking at a holistic view of my entire portfolio I consider it to be 100% stock, 100% bonds, and -100% cash. I also display the current leverage amount. When I am doing rebalance calculations I just treat it as 100% US large cap.

[MindBogler]

I think it depends on the purpose of the accounting exercise. When I am looking at a holistic view of my entire portfolio I consider it to be 100% stock, 100% bonds, and -100% cash. I also display the current leverage amount. When I am doing rebalance calculations I just treat it as 100% US large cap.

The accounting exercise is solely to understand the total portfolio so i am able to perform rebalancing operations and/or direct new contributions to the most underweight category: bonds, LC, SCV, Intl.

[firebirdparts]

Boy, I sure got a whipping today. It only lost the growth back to August 20, but it feels a lot worse.

[codoriti]

Boy, I sure got a whipping today. It only lost the growth back to August 20, but it feels a lot worse.

Yeah, these last 2 days felt brutal. I jinxed it when I said it felt so good a few posts above

[Dug8498]

I know I'm a little late on this response, but if anyone is interested, I found i was able to buy this with no transaction cost and a $500 minimum at firstrade. i believe there may be a $100 min for subsequent purchases.

FYI- I've found that first trade allows me to access many many mutual funds for $500- $1000 min and no fee that have extremely high entry costs at other brokers.

[mav12]

I know I'm a little late on this response, but if anyone is interesting, I found i was able to buy this with no transaction cost and a $500 minimum at firstrade. i believe there may be a $100 min for subsequent purchases.

FYI- I've found that first trade allows me to access many many mutual funds for $500- $1000 min and no fee that have extremely high entry costs at other brokers.

That helps. Thank you. I've tried other brokers and not much luck, Schwab and TDA it is $50. Do you know if FirstTrade charges an Early Redemption Fee, basically is you sell the fund within 30 to 90 days? Some brokers have 30 days, some 90 days. Also, FYI there is some negative feedback on their Customer Service. https://investorjunkie.com/reviews/firstrade/

[NMBob]

Boy, I sure got a whipping today. It only lost the growth back to August 20, but it feels a lot worse.

Yeah, these last 2 days felt brutal. I jinxed it when I said it felt so good a few posts above

one week return from morningstar, as of 4 sept. VTSAX = -2.37...PSLDX = -1.54

[jarjarM]

Boy, I sure got a whipping today. It only lost the growth back to August 20, but it feels a lot worse.

Yeah, these last 2 days felt brutal. I jinxed it when I said it felt so good a few posts above

one week return from morningstar, as of 4 sept. VTSAX = -2.37...PSLDX = -1.54

Long bond should help today too.

[Dug8498]

I know I'm a little late on this response, but if anyone is interesting, I found i was able to buy this with no transaction cost and a $500 minimum at firstrade. i believe there may be a $100 min for subsequent purchases.

FYI- I've found that first trade allows me to access many many mutual funds for $500- $1000 min and no fee that have extremely high entry costs at other brokers.

That helps. Thank you. I've tried other brokers and not much luck, Schwab and TDA it is $50. Do you know if FirstTrade charges an Early Redemption Fee, basically is you sell the fund within 30 to 90 days? Some brokers have 30 days, some 90 days. Also, FYI there is some negative feedback on their Customer Service. https://investorjunkie.com/reviews/firstrade/

I haven't tried to sell anything i've purchased on there yet, so i couldn't tell you. However, when purchasing, there is no language from them indicating that's the case.

Yes, if you try to call them with a question, you will be on the phone for a solid hour before you reach anyone. Their customer service is nowhere near that of schwab, fidelity, or vanguard, but other than that, I've had no issues.

[mroe800]

Boy, I sure got a whipping today. It only lost the growth back to August 20, but it feels a lot worse.

Yeah, these last 2 days felt brutal. I jinxed it when I said it felt so good a few posts above

one week return from morningstar, as of 4 sept. VTSAX = -2.37...PSLDX = -1.54

Long bond should help today too.

Well, it didn’t help today for some reason.

[Tingting1013]

Boy, I sure got a whipping today. It only lost the growth back to August 20, but it feels a lot worse.

Yeah, these last 2 days felt brutal. I jinxed it when I said it felt so good a few posts above

one week return from morningstar, as of 4 sept. VTSAX = -2.37...PSLDX = -1.54

Long bond should help today too.

Well, it didn’t help today for some reason.

Dividend day

[jarjarM]

Boy, I sure got a whipping today. It only lost the growth back to August 20, but it feels a lot worse.

Yeah, these last 2 days felt brutal. I jinxed it when I said it felt so good a few posts above

one week return from morningstar, as of 4 sept. VTSAX = -2.37...PSLDX = -1.54

Long bond should help today too.

Well, it didn’t help today for some reason.

Dividend distribution, actual return for the day is -1.8%

[mroe800]

I should have checked that before opening my mouth. I knew -5% seemed off compared against the day, but the dividend shares haven’t posted in Vanguard and I hadn’t checked PIMCO website yet.

[pwill112]

So if I put 100k in PSLDX on day one what will my underlying asset allocation look like?

I will have some stocks
I will have some bonds
I will have a negative cash balance?

[UpsetRaptor]

So if I put 100k in PSLDX on day one what will my underlying asset allocation look like?

I will have some stocks
I will have some bonds
I will have a negative cash balance?

Yep.
100K
100K
-100K

[guyinlaw]

Any idea how much is the fees to buy PSLDX at Interactive Brokers?