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I hate to tell you this but it was jack bogle and not me that said no one yet has ever lost a penny in a treasury bond fund as long as they stayed in the fund long enough to match the funds duration.
One of the aforementioned "experts you like" in this scenario.
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Originally Posted by mathjak107
Got an issue with it argue it out with jack bogle.
I'm talking to you, not Jack Bogle.
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Originally Posted by mathjak107
You are trying to argue against one plus one equals two.
No, I'm not. I'm arguing against refusing to acknowledge that experts disagree about this.
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Originally Posted by mathjak107
Maybe a simple example will help.
Yet again you've ignored what you're replying to, and insisted on simply pontificating yet again, without regard to what is being said to you. Here is an exercise for you: Outline the arguments of the experts you disagree with, with sufficient comprehensiveness and compelling presentation to prove that you actually understand their perspective.
When you figure it all out let us know we will be glad to hear it.
There are only 2 facts i stated and both are true.
It is common sense that since bonds do not fall nearly as much as stock when they do they are cushioning stocks fall and controlling the volatility level of your portfolio.
You can almost set your watch by the fact in a major plunge treasury bonds have moved the other way...there is nothing to debate. Bonds control your volatility level plain and simple.
A mix of equities and cash will swing far more and be far more volatile in a downturn than the same mix of equities and bonds.
To maintain the same level of volatility you have to reduce your equity level and add more to cash .
If you are saying this is wrong logic then all i can say is you are betting against the house because there is nothing i said that requires an argument.
No where did i even say it will produce a positive return in a down turn.
All i said is if you want to maintain a certain level of swing you will have to go with less equities cutting your potential gains if you use cash instead of bonds.
I have no clue where your supposed experts come into this discussion. Quite frankly if they debate that logic i don't see them as much of an expert.
Last edited by mathjak107; 08-27-2013 at 04:40 AM..
You have been commenting on my postings so it is not me who is not reading. Nothing i said can be argued as there is not anything in that logic that is a point of argument.
I am not saying own bonds because they will go up. I said no such thing.
All i said is for those who want to control volatility in their portfolio owning bonds even at these levels can produce better long term returns than going to equities and cash.
Just about every major plunge has had treasury bonds rise and soften the blow ,cash can not do that so it will cushion less. I will accept those odds as being pretty good protection.
Why don't we just stop here? I think your perspective is very well encapsulated by this comment you've made.
If you want to continue, then please do as I asked earlier: Outline the arguments of the experts you disagree with, with sufficient comprehensiveness and compelling presentation to prove that you actually understand their perspective.
I have no idea what experts you want me to dispute.
In fact short of the fidelity insight newsletter who brought up this issue of volatility with cash instead of holding bonds i do not even know anyone who disputed that fact.
Whether the debate ran its course ,That is up to whether the op has his question answered as to whether as a conservative investor he should still own bonds.
I have showed compelling reasons why he should. If there are things he does not understand than it will be further explained.
Last edited by mathjak107; 08-27-2013 at 05:34 AM..
Much as I hate to break into this discussion, it does not have to be a question of bonds or equities. What we did was to maintain our bonds weighting as part of the overall portfolio but to reduce the number of long maturities and increase the number of short maturities.
Precisely, and we've also started introducing some more diversification of fixed-income investment types (one example being floating-rate funds). I'm not convinced that any of them are necessarily better or worse - against, despite what some folks would like to have you believe, there is no definitive answer with regard to that - but I figure that more diversity is likely to serve the need better than less diversity, at least in that regard. (One floating-rate fund I've recently added has a 0.15 year duration.)
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