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Thanks for sharing mathjak! It's such a weird time, things that are assumed to be stable could be on the cusp of being not stable and have some turbulence, but as of now, things that are already seen as shaky, like high income bonds are doing good. Guess the only thing to do is buy some and diversify. Government bonds are 12% of my portfolio, don't think I'd add any more, I'll keep it there in case rates fall from some sort of fallout. FFRHX could be a nice avenue to diversify that would be different from both stocks and government bonds. I think I might drop some $$ into that!
It's also important to remember TLT probably won't go back to it's top because there have been a few more ETFs made available, hence dilution. I would suggest averaging down if you can.
nothing says if stocks fall that tlt goes up if it is from tight money .
as well as tlt is best used as part of a barbell like it is in the permanent portfolio or golden butterfly .
then it is no more rate sensitive then an intermediate term treasury but with more flexibility
100% of the bond money in IEF the intermediate term treasury etf is pretty much the same as 50% in tlt and 50% in cash instruments
used alone tlt is a speculation on long term rates no different then gld used alone would be a speculation on gold.
these kinds of assets that respond very powerfully to whatever it is that moves them are best used as part of a portfolio..
the conservative permanent portfolio is up about 6% ytd despite its holding tlt .
that is pretty close to the more conservative insight income model which is up 5.50% and uses no long term bonds or gold . it is just 25% conservative equity funds and short to intermediate bond funds .
both are ahead of the ytd had one bailed to cash yet have quite a bit of upside potential if rates come down or stocks do well . yet the income model is 75% less volatile then the s&p
as opposed to cash instruments which will fall in income if rates fall
the yield on the mix we have now meets our goals nicely but i do have to be careful of iirma surcharges since taxable income streams have really increased from what they were.
i am winding down my tour of duty from three and four days the last 3 months at work helping them to two days for the winter and back to my one day when the weather allows us to get out more .
that is the down side to working while on medicare with substantial income streams too …
i purposely went with a large position in berkshire in our taxable account and not one of the insight aggressive portfolios for our long term money because i don’t want anymore income spinning off.
i really tried to fine tune the models to match the income . we are out of the proverbial red zone now so we have a lot more flexibility in what we can do
so five years is split between the income model and cash instruments… up or down in rates and we still benefit .
10 years in the growth and income model and the rest left over in 100% equities between vti , berkshire and gold and commodities ….although with 157 billion in cash berkshire is about 75% less volatile then the s&p is
Last edited by mathjak107; 11-18-2023 at 03:29 AM..
the only difference is what investors are willing to accept as a return .
every sale of an available bond ends up with a buyer or a market transactions can’t take place..
financial markets always require one buyer for very share sold and since all liquid assets are sold it isn’t a case of missing buyers
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