The dividend shuffle game?

[ken-do-nim]

Here's the article; it was TMF not TYD.

[fenders53]

Same thing, long-term bonds. Remember that thread where we were talking about monthly automated strategies? TMF or TYD can be used a strategy. Hide out in TMF when TQQQ has poor momentum the past 3 months. TMF might not go up a lot if TQQQ crashes, but it will likely be flat at the worst. When rates were higher long-term bonds worked extremely well as a stock market hedge. The 60/40 strategy I'm sure you've heard about back tests well the past 100+ years.

About 70% of Vanguards bond funds have a negative total return this year and yield less than 2%. Not a great place for a retiree to fight inflation and get some income to spend.

[fenders53]

This is worth doing Ken. Pull up a one month chart of TQQQ and add TMF as a comparison stock. See how it might be tempting for a trader to attempt to flip back and forth? In a paired trade last month they are both positive, but it takes the daily volatility out when TQQQ has a particularly big move. Works about the same with QQQ/TLT. You can't see the point in a long-term chart. Now look at ten years. The bond fund is chugging along paying you a 2 or 5% yield over the long-term unless rates make a big move. QQQ is blowing TLT away as a long-term hold in a strong bull market obviously. Graphically you can't see how it would be beneficial in a pair over a longer term, but it is if you are using rules and trading in and out of QQQ, or at least adjusting the ratio of QQQ vs the long-term bond fund.

[ken-do-nim]

I'm honestly not sure what my portfolio will look like when I'm in the capital preservation, drawdown phase, but I guess I have many years to figure that out. It also makes a difference what the port size is. If I get to the $2M mark, I'm going to want a higher port yield than if I make it to $4M, and the lower the port yield, the closer I can get to just putting it all in VOO or SCHD.

(cross-post: this was in reference to including bonds in the port)

[fenders53]

(08-02-2021, 08:48 AM)ken-do-nim Wrote: I'm honestly not sure what my portfolio will look like when I'm in the capital preservation, drawdown phase, but I guess I have many years to figure that out.  It also makes a difference what the port size is.  If I get to the $2M mark, I'm going to want a higher port yield than if I make it to $4M, and the lower the port yield, the closer I can get to just putting it all in VOO or SCHD.

(cross-post: this was in reference to including bonds in the port)

I understand.  I see zero incentive in bonds as holdings right now.  VOO and SCHD have 30% downside potential though so they are not relevant to the bond conversation.

[ken-do-nim]

Oh; I guess I think of them as pretty safe in the long run. Looking at the S&P 500, 2018 and 2015 were minor blips; 2008 was pretty bad though (-38.49%). I'm curious how some of these "retiree-safe" bond funds did in 2008.

[fenders53]

(08-02-2021, 09:50 AM)ken-do-nim Wrote: Oh; I guess I think of them as pretty safe in the long run.  Looking at the S&P 500, 2018 and 2015 were minor blips; 2008 was pretty bad though (-38.49%).  I'm curious how some of these "retiree-safe" bond funds did in 2008.

It's all good until it happens the year you are retiring.  Know anyone that had their 2008-2010 retirement cancelled by the market?  I do and I felt really bad for them. How about 2000-2010?  10 years of no port growth is not a blip to me.  You ever dump a stock that didn't go up for 90 days?  If so, a decade may not be a blip to you either.  I would not be retiring next year had I not gotten lucky and missed over half the pain of the GFC.  I have a lot of respect for steep corrections due to high valuation.  Real Estate that time and not stocks. We never know what the next trigger is. I believe the next one will be related to printing money so that probably isn't it. That's just how it works.      

By the way TLT was up 20% the month the 2008 GFC crash happened.  So up 58% over SPY.  TLT is a good proxy for a safe retiree bond fund.  I have no interest now, but TLT has been around forever and a good comparison when you are playing with charts.

[NilesMike]

(08-02-2021, 07:45 AM)fenders53 Wrote:

(08-02-2021, 06:02 AM)NilesMike Wrote: Bonds, as part of my TYD/UPRO strategy, has worked out very well.

TYD is down about 15% the past year.  OK as part of a trading strategy but zero interest in holding it.     

Ken, when bond yields are more normal, mid to long-term bonds are a great hedge against equities.  Bond prices run up when rates drop.  Unless the FED goes negative there just isn't much room for bond price appreciating.  This is the first time in my life when cash may outperform bonds for any length of time.  I highly doubt Mike is holding TYD for an extended length of time.

I am actually ALWAYS holding some TYD. When the market is risk on 50% of that portfolio is in TYD, when market is no-go, 100% is in TYD.

I think I've linked this before (strat @ Drftr TYD?UPRO.) https://martinschwoerer.medium.com/etf-i...d6d51a3e32

It's a simple hedged strategy that blows away the market and has way less drawdowns. Haven't found much that beats this.

[fenders53]

(08-02-2021, 05:59 PM)NilesMike Wrote:

(08-02-2021, 07:45 AM)fenders53 Wrote:

(08-02-2021, 06:02 AM)NilesMike Wrote: Bonds, as part of my TYD/UPRO strategy, has worked out very well.

TYD is down about 15% the past year.  OK as part of a trading strategy but zero interest in holding it.     

Ken, when bond yields are more normal, mid to long-term bonds are a great hedge against equities.  Bond prices run up when rates drop.  Unless the FED goes negative there just isn't much room for bond price appreciating.  This is the first time in my life when cash may outperform bonds for any length of time.  I highly doubt Mike is holding TYD for an extended length of time.

I am actually ALWAYS holding some TYD. When the market is risk on 50% of that portfolio is in TYD, when market is no-go, 100% is in TYD.

I think I've linked this before (strat @ Drftr TYD?UPRO.) https://martinschwoerer.medium.com/etf-i...d6d51a3e32

It's a simple hedged strategy that blows away the market and has way less drawdowns. Haven't found much that beats this.

Yes I have checked out the strat.  I have no interest in holding TYD by itself.  Down 15% last 12 months is not what I am looking for when I think buy a bond.  As part of a strat that flips positions, I get it.

[NilesMike]

(08-02-2021, 06:02 PM)fenders53 Wrote:

(08-02-2021, 05:59 PM)NilesMike Wrote:

(08-02-2021, 07:45 AM)fenders53 Wrote:

(08-02-2021, 06:02 AM)NilesMike Wrote: Bonds, as part of my TYD/UPRO strategy, has worked out very well.

TYD is down about 15% the past year.  OK as part of a trading strategy but zero interest in holding it.     

Ken, when bond yields are more normal, mid to long-term bonds are a great hedge against equities.  Bond prices run up when rates drop.  Unless the FED goes negative there just isn't much room for bond price appreciating.  This is the first time in my life when cash may outperform bonds for any length of time.  I highly doubt Mike is holding TYD for an extended length of time.

I am actually ALWAYS holding some TYD. When the market is risk on 50% of that portfolio is in TYD, when market is no-go, 100% is in TYD.

I think I've linked this before (strat @ Drftr TYD?UPRO.) https://martinschwoerer.medium.com/etf-i...d6d51a3e32

It's a simple hedged strategy that blows away the market and has way less drawdowns. Haven't found much that beats this.

Yes I have checked out the strat.  I have no interest in holding TYD by itself.  Down 15% last 12 months is not what I am looking for when I think buy a bond.  As part of a strat that flips positions, I get it.

I'm assuming you didn't like the strat enough to use it?

[fenders53]

Nothing wrong with the strat. I do intend to use it. I remain distracted with the put selling game. I've had a really good 2021 while remaining conservative. JUL was mediocre though.