Author Topic: New Paradigm?  (Read 29603 times)

eastbound

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Re: New Paradigm?
« Reply #75 on: January 22, 2016, 01:29:59 PM »
muni ladders are great, pb, and ive got a ladder of sorts in my portfolio--part of my 57%--gotta be money you wont need before maturity or call, tho--if you go to liquidate odd lot munis before they mature, the bid will be so low as to cancel out any of the yield and tax advantage over treasuries, even.

now if your ladder is comprised of round lots, you should be focussing on building another few pono houses and which new jet you'd like.

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SuppaTime

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Re: New Paradigm?
« Reply #76 on: January 22, 2016, 04:27:37 PM »
I never understood John Bogle's advise on age-in-bonds. The trouble with bonds is that they are a terrible hedge against inflation. I fear inflation more than I fear the volatility in equity markets.  After all, inflation is a permanent loss while market declines always recover. Equity value (unlike bond principal) and dividends tend to track inflation. Historically it has taken 4-6 years to recover from a bear market, although it took much longer for the equity markets to recover from the 2001 crash. So the key is to be able to ride out a bull market without selling equities that are under water. Using that I calculated how much of our assets need to be in "safe" holdings (intermediate term bonds and cash) and the rest went into equities. It came out to about 65/35 (equity/bond). I back-tested that against historical equity data with modern bond returns and it tested out very well, even when I artificially jacked up the rate of inflation. But of course all of this very dependent upon one's rate of withdrawal and time horizon. There is no one-size-fits-all answer.

Al Gore started an investment fund about 10 years ago that specializes in sustainable investments. By that he means socially and environmentally sustainable. It has been doing very well according to the article I read. It sounds interesting, hopefully a trend that grows. You can read about it here:

http://www.theatlantic.com/magazine/archive/2015/11/the-planet-saving-capitalism-subverting-surprisingly-lucrative-investment-secrets-of-al-gore/407857/
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PonoBill

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Re: New Paradigm?
« Reply #77 on: January 22, 2016, 04:55:55 PM »
Well, you could do TIPS, but you pay for what you get. Retired folks with a few bucks worry more about taxes than most other things. Munis help, especially when you live in a state like Oregon that taxes the crap out of capital gains.

I think there's a place for simple annuities in some folks portfolio if you buy them at the right time and pick one or two that don't kill you with fees.

Bonds are more of a place to park money that you're likely to need in the timeframe that the market recovers. The older you get, the shorter the timeframe you can handle--hence age in bonds. I'm not trying to make money with investments, I just don't want to lose it.  I know how to make money, and investing ain't it.
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Subber

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Re: New Paradigm?
« Reply #78 on: January 22, 2016, 06:33:31 PM »
muni ladders are great, pb, and ive got a ladder of sorts in my portfolio--part of my 57%--gotta be money you wont need before maturity or call, tho--if you go to liquidate odd lot munis before they mature, the bid will be so low as to cancel out any of the yield and tax advantage over treasuries, even.

now if your ladder is comprised of round lots, you should be focussing on building another few pono houses and which new jet you'd like.

+1 on selling odd-lots (and buying odd-lots in the secondary).

Here's a bunch of typical trades on an A- rated, intermediate maturity muni:

Size            Price   Yield         Cond   Trd Date                
45000    ↑112.694   3.000   SLT   1/22/16
50000    ↓109.927   3.412   DLR   1/22/16
50000    ↑111.927   3.113   SLT   1/22/16
20000   ↑111.473   3.180   SLT   1/22/16
1250000   ↑109.815   3.430   SLT   1/22/16
1250000   ↓109.715   3.445   BUY   1/22/16
15000   ↑111.473   3.180   SLT   1/22/16
35000   ↓108.723   3.595   BUY   1/22/16

You can see the round lot buy and sell are pretty close together at 109.715 and 109.815.

There is an odd-lot buy (by the broker from the client) at 108.723;
and odd-lot sells (by a broker to a client) at 112.694, 111.927, etc.

Lots of trades for odd-lots are wider than these.



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eastbound

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Re: New Paradigm?
« Reply #79 on: January 22, 2016, 07:48:38 PM »
there was an odd lot bulletin board on dlj direct (long gone, folded into etrade, i believe) that was great. they showed their entire inventory, with on-the-market asking prices, for all or none odd lot sizes. bought corps and munis there. seemed of utility for dlj direct as they sought to get rid of inventory, and good also for individual investors. not sure why no one else has run with the ball on this. and liquidity is currently worse than ever in all fixed income instruments, due to balance sheet constraints, and the need for dealers to invenotory in order to make agressive competitive markets.
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SuppaTime

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Re: New Paradigm?
« Reply #80 on: January 22, 2016, 08:56:17 PM »
I like Munis also. But I research the hell out of things I invest in - credit rating, default history and liquidity issues. Munis are devalued, and pooh-pooed, by their lack of liquidity. Buying is the easy part, selling when you need to is the bigger challenge for bonds and particularly Munis. Because of that I limit the overall Muni exposure to about 30% of fixed income allocation. Of course if you are in the accumulation phase of investing and hold to maturity, liquidity is not so much of an issue. But I am not so certain of my own liquidity needs so it becomes a factor.

Fun stuff. Kind of a second, or third, hobby.
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PonoBill

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Re: New Paradigm?
« Reply #81 on: January 22, 2016, 11:25:18 PM »
That's why I ladder them, both to reduce the interest rate exposure and to provide a relatively constant set of bonds coming to maturity. Not a panacea, but then what is?
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Chan

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Re: New Paradigm?
« Reply #82 on: February 05, 2018, 02:43:12 PM »
No problem hearing this one.  It's a textbook humdinger.

lucabrasi

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Re: New Paradigm?
« Reply #83 on: February 08, 2018, 08:37:05 AM »
Interesting couple weeks, aye? Holy cow.

How about these. Talk about a rollercoaster.
I found the home price one while searching the bitcoin one.
Bitcoin is from 2/17-2/18.
Interesting times out there right now it is.

Subber

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Re: New Paradigm?
« Reply #84 on: February 08, 2018, 09:47:27 AM »
Parabolic up....until it isn't any more - crash - ugh.

Stocks were also parabolic up since at least mid-2015.

& Rates going up.
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PonoBill

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Re: New Paradigm?
« Reply #85 on: February 08, 2018, 10:53:58 AM »
With about ten billion invested in volatility bets (nothing but betting), it's no surprise that the market is volatile. Every time someone builds something new and spooky a bunch of people jump in. What the fuck are they thinking? I'm not a hobby investor. Old, slow, and in the way. I keep it simple and try not to pretend to understand stuff I don't really understand. For me, the most important thing I've learned is don't pay people stupider than me to manage my money. I have a very smart, fee-only advisor helping keep the train on the rails. And he doesn't get to do anything without direction. In a four percent world, you can't pay two percent to a "money manager". Especially when they use their access to steal another percent.
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eastbound

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Re: New Paradigm?
« Reply #86 on: February 08, 2018, 11:24:31 AM »
tru that, pb--and where riskless real rate of rtn has been <zero, expenses really matter

much as compounding is a saver's best friend, front and current-loaded expenses are a terrible enemy

i have been using robo-adfvisors of recent--for a lousy 15 bp's you get totally free unlimited transaction of low-expense etf, using algo's at least as good as those sold by goldman for a 150bp annual mgmt fee--so far wealthfront has beaten out schwab intelligent and betterment--these are the three i funded last year at this time--the funds are doing what they are supposed to--they tracked most of the gains in s and p since then, and took a meaningfully lessser hit in the breakdown this week

my professional trading? net, results are good, but the ride this week is why i aint in the water today! wild

got bids in at cme for bitcoin futures at 4005--may miss but i can only buy serious weakness in crypto--hope is to buy in at 4005, see a decent pop, sell part to reduce cost basis and forget about the position for many years, consider the money lost! see what happens---not a serious believer in crypto, but want a small stake in case it rox

check out bitcoin trust--a closed end fund that invests in various crypto--it trades at a 40% premium to NAV, but, if you invest direct with the fund mgr, and commit to a one year hold, they expand the fund for your purchase amount, and you pay NAV with no premium--i plan to do that too, but the acct opening process has been painful--actually need a letter from my acct attesting that i am an accredted investor!

sudeen volatilitypop? the range from last friday's high in the s and p to tuesday's low was roughly 300 pts--3 trading days--on the way up, the number of days that encompass that same 300 pt range was 80! wild

short VIX vol will continue to be in the news as we learn of innumerable funds that have blown up

my dad quit lawyering back in the day having started a fund that shorted vol--nixon deval'ed the dollar (member that--a real surprise to markets) and he blew up--for a while we felt kinda rich--no mas--he went on to start a very successful new firm with yale law pals--but i short vol very gingerly, perhaps based on that

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Beasho

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Re: New Paradigm?
« Reply #87 on: February 08, 2018, 11:59:03 AM »
i have been using robo-adfvisors of recent--for a lousy 15 bp's you get totally free unlimited transaction of low-expense etf, using algo's at least as good as those sold by goldman for a 150bp annual mgmt fee--so far wealthfront has beaten out schwab intelligent and betterment--these are the three i funded last year at this time--the funds are doing what they are supposed to--they tracked most of the gains in s and p since then, and took a meaningfully lessser hit in the breakdown this week

Eastbound: Where and how do you purchase or engage with this instrument ?

PS: I could probably google this but you starting crowing so I figured I would ask.


eastbound

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Re: New Paradigm?
« Reply #88 on: February 08, 2018, 01:51:53 PM »
beash

just go to the sites of schwab intelligent portfolio, wealthfront, and betterment---also fidelity tdam and other major brokers have rolled out similar product--they will likely perform closely, one to the other--my better result from wealthfron is based on one year invested, so not so meaningful--and these robo advisors have only been around for a couple of years, mostly in bull mkt conditions--so not remotely a panacea, but a seemingly good concept, that seems to be doing as intended-

funny i reviewed this thread and my crude trade was quite good, tho crude is a huge neg carry commodity, so the futures contract calenadar rolls cheaper---criude took afew months from my purchases in the low 30's for spot to get to the lo 50's--carry, as reflected in the calendar rolls i had to do, consumed half the profit--much more fun to short neg carry instruments--crude is getting there-i iwill let you know when i short-also the stock buys i discussed here in 2016 were excellent, and the robo buyins in early 2017 have been good too--caveat that all is quite less good right now! thsi week!

i have no opinion on stox in here---i am off the bogle "age in bonds" tho have no more than 60% of fin'l assets in stocks--what ive realized is it unlikely i will die anywhere near broke---so i am investing for my daughters, and that protfolio will run another 60 yrs likely vs my 25--

re stox--they may continue to go up, but there will be violence along the way--buy weakness lighten up to gain ammo on strength--if you miss a market DO NOT CHASE

if youve lamented being underinvested, buy small in here--this is certainly "weakness"--but it doesnt feel like a v bottom to me---recall 2009--sandp spot futures printed a low of 665.75-- today's spot is 2593, was as hi as 2878! last week!--i know that number bc my whole shop got on this thing where we were going to buy 666, the devil #---we did and immediately the market took off up 10%+--as prof traders we dont believe in v bottoms--mkts, in fact usually bounce and test at least once when they put i serious new lo's, before any secular turn can begin---so we all pitched positions up appx 10%--gift horse and all that too--well it never tested and never looked back---and i didnt have it in me to buy strength for a long time after that---but stox arent my bread and butter--mathy fi rv arbitrage is my lunchbox

and like cheat says--think long and hard, invest accordingly and dont tweak with any frequency--add money in and tweak with that! i am a 35 yr prof trader, but i run my core personal portfolio largely as cheat describes

but if youve been underinvested in stox, and want to buy a bit here, just buy a mix of spy, dia, and qqq---effing thing is collapsing as we speak, threatening to revist low of monday---seems to be holding....for now---dow futures were just down over 1000 pts, on the day, now down "only" 775

i ahve a big funding structure in short term treasuries and ff contracts---had a record year begun--no mas--but this roberto duran is still in the ring!

i believe in capitalism, but well-regulated capitalism and markets--some say strange for a lefty--whatever---and i do think the whole system is somewhta rigged, bogus, and owned by the most powerful, financially/politically--but it's the system that allocates weatlh and economic enfranchisement, so bad as it may be, to not play, means to not be enfranchised---so i play--and up until now, when i have begun the "horoscope diet" dynasty, i have avoided sleazy investment concepts--no gun manufacturers!

good luck all! that's perhaps the most important part--beter i say "good luck managing your luck"

the other thing--dont waste money on depreciating assets--cars? i i drive a 2010 subaru---real estate? i own some--but with re, dont forget that the trimmings are consumption items--you can renovate an owned apt (no exterior maintence in the equation)---board it up, hold it for 15 years, and you have an out of date apt, in perfect condition, that needs a complete redo renovation and will price accordingly for sale
Portal Barra 8'4"
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