So the question becomes, in times like these, and what is directly ahead,
Is the "F" fund a good place to put your nest egg?
Re: F Fund for a deflation trade.
Okay, those looking to play with F as a longer term hold towards a 'deflating' economy, be weary. Reason being, the average bond duration for Aggregate Bond Index is only around 6.2 years. The low end durations (<10 years) have been manipulated by the Fed's artificially low interest rate and really don't have any upside left. (Basically, the Fed buys the short end to keep rates low.) The high end bonds (30 year treasury) have been flying off the handle because that is where the buying interest has been amongst institutions. Usually a 30 year is yielding at least high 4% (or 5%), whereas today it yields 3.69!
We shall see whether the rejection on Friday was a reversal of the deflation trade or 'profit taking' at resistance.
I'm personally out of treasuries for the deflation trade as I closed out positions last Wednesday. I do, however, have some exposure as part of a diversified LT indexed portfolio.
Bullitt, thank you for your thoughts on F Fund. I'm still about 45% in F and wishing I'd had your prescience on when to exit.
Maggie
"When asked if my cup is half full or half empty, my only response is that I am thankful I have a cup." -Sam Lefkowitz
I'm thinking about parking some into F fund tommorow, what are your thoughts on that. I'm wondering if this is a bad idea? I hear there is a bond bubble, but I mean seriously, with the stocks tanking people should still be driving bonds up right?
Just a lil o'l fishegg floatin around in this big ocean!
ok?....help me understand what that chart says. It's way up so it's gonna come down soon?....(i'm reeaal slow)
Just a lil o'l fishegg floatin around in this big ocean!
That last big red candle ain't lookin too good. This thing's had a nice run. How much longer do you think it's gonna last?
There are people looking at the 1010 level in the SPX. Theres a good chance that there will be some buyers there and that money might come out of bonds.
Show-me posted this link in his account talk thread.
http://finance.yahoo.com/news/Invest...6&asset=&ccode
You might want to check my position on the tracker before you listen to anything I have to say.
Make your own decisions and live with the consequences.
...
Just a lil o'l fishegg floatin around in this big ocean!
We still have a ways to go before we can put a nail in the F-Fund coffin. Volume on the sell-off leads me to believe it was just your standard "profit taking."
Attachment 9907
Retired, 10G/90C_ BLOG: Stats for April, 2024 Stats
Bullitt, thanks for speaking to the average duration in AGG. I hadn't seen that before. I understand the associated duration risk better than I ever did before. So can you speak to the fact that there were 12-18% gains in F in the mid80s? What duration would that bond portfolio have been? does AGG average duration ever change? did the Fed drive down the yield in the 80s after Volker spiked yields to bring down inflation in the late 70s?
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EFA (I Fund) (delayed) (Stockcharts.com Real-time) |
BND (F Fund) (delayed) (Stockcharts.com Real-time) |
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