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i was just saying in general ,not directing it at you.
its almost comical that the best performing asset for 1 yr,5 yr ,10 yr 20 yr and 30 yr periods are the long treasury bond.
so much for the genuis in all of us
Yeah, I just read an article on this very thing today. Depressing .
But long treasury bonds just can't possibly get double digit returns going forward in the next 5 years or so. Interest rates are rock bottom. Personally, I'll be happy if we don't default on our debt in the next 30 years (or do a "soft default" by inflating our way out of the debt...which we are already doing to some extent).
The funny thing is I've read the Intelligent Investor about five times and Ben Graham talked about a 50% stock/50% bond allocation! Furthermore I ran into Jack Bogle in the airport in Phillyin the beginning of 2007. He told me a 50 percent stock/50 percent bond proposition in low fee no load indexing would outperform over the long haul. Despite the S and P being lower than it is at the peak of 07, those who actually maintained the above scenario have far more money in their accounts than they did at end of 07. The more I learn about investing the more I see most of it is BS designed to seperate people from their money. Margin of safety when buying individual stocks, personal savings rate, and keeping fees as low as possible are all that really matter.
You have a good point here. Vanguard Balanced Index is 60% total US stock market & 40% total us investment grade bond market.
15 year returns: 6.36%
10 year returns: 4.85%
5 year returns: 3.41%
3 year returns: 12.06%
1 year return: 4.55%
It's beaten the S&P 500 over all these periods except the 3 year period.
This is not the best balanced fund out there, but it is in the top 25% for the most recent 5, 10, & 15 year periods.
Boring investments can be a great strategy.
Once you get $10,000 in your account, you will slightly better returns because they'll give you the Admiral share class.
actually the fund i had mentioned earlier this year as a decent choice fidelity strategic dividend and income was one of the best performers clocking in at a 7% gain.
as far as treasuries go im not counting on double digit returns again although with the long bond it could happen but i am counting more on return of my money than returns on my money with them.
as robert kessler believes the un-leveraging of the world can take a very long time and thats deflationary.
the long bond may still have another point to fall yielding a juicy 30% return again.
the world is buying trillions in treasuries and thats a major point. all indications are that deflation and slow growth may be with us another 5-10 years until the world recovers . even 16% gains in corporate profits couldnt push the markets ahead against all these pressures in the world and thats scaring me about equities.
ill never not own equities but im not counting much from them the next 5 years . i think once again the long treasury bond may very well be the winner.
as far as this year
fidelity strategic income + 4.6
fidelity strategic dividend and income +7.3
fidelity low priced stock fund -.1
fidelity conservative bond fund + .1
fidelity short term bond +1.8
cash 1.00%
what killed me was i owned total international equity fund for most of the year before selling it as well as fidelity equity income which i sold at a loss.
TLT long treasury bond fund + 33.6
GLD gold fund + 26.6%
VTI total market fund -.04
cash 1%
Last edited by mathjak107; 01-06-2012 at 02:53 AM..
actually the fund i had mentioned earlier this year as a decent choice fidelity strategic dividend and income was one of the best performers clocking in at a 7% gain.
as far as treasuries go im not counting on double digit returns again although with the long bond it could happen but i am counting more on return of my money than returns on my money with them.
as robert kessler believes the un-leveraging of the world can take a very long time and thats deflationary.
the long bond may still have another point to fall yielding a juicy 30% return again.
the world is buying trillions in treasuries and thats a major point. all indications are that deflation and slow growth may be with us another 5-10 years until the world recovers . even 16% gains in corporate profits couldnt push the markets ahead against all these pressures in the world and thats scaring me about equities.
ill never not own equities but im not counting much from them the next 5 years . i think once again the long treasury bond may very well be the winner.
Only time will tell what the future holds. I can see logical arguments for both inflation and deflation. No one knows for sure.
At this point, long bonds are quite volatile. If interest rates on long dated treasures go up a percentage point, your returns could really get smacked.
I know the world is buying trillions in teasuries....but that can change quickly, just as it has for Greece and Italy.
I do believe the de-leveraging process for the developed countries will be a long and painful one. I don't see how it could be any other way, to be honest. Politicians are going to have to renege on the unsustainable promises that were made in past decades, but citizens will fight it tooth and nail, since no one likes bad news and everyone wants someone else to take the hit.
Of the funds you listed, I think I like Fidelity Strategic Income most. It's a tamer version of Loomis Sayles Bond. Lower overall returns, but also less volatile, Better returns than those in the plain vanilla intermediate term bond category. (Better long term returns than Pimco Total Return, the world's largest bond fund).
Last edited by mysticaltyger; 01-07-2012 at 01:26 AM..
Investing to me SHOULD be non-time consuming and boring to me!
It gives me more time to pursue my hobbies and spend time w/my family! And to boot if I have a combination of diversified investments suited to my risk tolerance in LOW COST investments, I will outperform the overwhelming majority of "traders"/stock pickers/etc....
thats what my goal was. i want to put as little time into a good plan as i can. in my accumulation stage my goal was to also get all the benefits of being fully invested 100% in the s&p 500 but doing it by only being 80% or so invested and using other asset classes to smooth the valleys out .
getting more reward than the risk level and as little time devoted to doing it was my game.
watching the volatility of the permanent portfolio concept at times can be like watching paint dry its so boring.
Last edited by mathjak107; 01-07-2012 at 08:55 AM..
long term treasuries shouldnt be your investment, they should be part of your investment.
when i first started to use the permanent portfoilio concept i used the benham capital target date bond funds. they were zero coupon treasuries.
talk about wild swings. they were incredibly volatile.
in fact i had to tone them down as they would swing more than the gold portion.
but long term treasuries when combined with gold make a nice balance.
there used to be a strategy called the armadillo strategy. it was 80% intermediate treasuries,10% gold ,10% equities.
Yes, I know what you're saying about long term treasuries. I just prefer the flexibility of a global bond fund like Templeton Global Bond or Loomis Sayles Global Bond or a multi-sector bond fund (like Fidelity Strategic Income or Loomis Sayles Bond).
4% Stable Value Fund. Everytime I try anything else I get slaughtered.
You're lucky you got 4%. A lot of stable value funds are paying less than that.
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