Huh?
See my previous post. Most people buy such things for income. If you don't need the income, then avoid bonds or income funds.
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- Thread starter Warstud
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See my previous post. Most people buy such things for income. If you don't need the income, then avoid bonds or income funds.
Huh? It's the entire premise behind shifting a portfolio from mostly stocks to more bonds over time as you approach retirement. Stocks are riskier and more volatile than bonds which is appropriate when you're younger and can make up losses but as you approach retirement and the time available to make up losses decreases, people move to bonds for capital preservation - i.e. not lose a bunch of money in the stock market just before retirement in an attempt to avoid SORRs. Someone made the comment that bonds haven't been that sexy for over a decade - that includes their yield. My point is they are rarely ever sexy and they almost never beat the market for any meaningful period of time and many people buy them because while they pay less they are also less risky/volatile. They are a safer place to put your money as you approach retirement.
That whole shifting thing is baloney. Not saying you are advising it, just saying be skeptical of anyone (including Fidelity!) who advise it.
Invest for your age sure. But invest for how much wealth you have, your timeline, your needs, your risk tolerance, etc
Sorry, my comment was just about bonds in general. PIMIX has a yield of 6.75% and if you're trying to build an "income portfolio" then it could be beneficial. The best income portfolios I've seen use CEFs that change little in price over time but pay out consistent yields of 8-12% per year after year. They can also be purchased at a price to NAV discount many times too but it's not a buy low and sell high kind of portfolio. Put $1M into this and you can live on $80-$120K per year without touching the principle. The problem with bonds being used for income is they still yield too little IMO and CEFs are a better choice at least based on my own personal risk tolerance.
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I'm in business school. This is what we talk about and it is not something being sold to me. I'm also not giving any advice or even suggesting this is a good idea. Since people will come across this idea frequently, I'm simply giving the rationale behind this strategy with no claim whatsoever to its validity.
Right...there's a tendency for people to only look at share price even when they're assessing an "income fund" that has gone down in price but has paid an incredible yield of 15% over 10 years.
Just because we're talking about bonds I'd like to point out for the BITOG readers there are some fundamental differences with bonds and stocks that go beyond share price/bond price/bond yield and the reason for the risk premium with stocks. A common stock is part ownership in a company and that is it (I'm ignoring preferred stocks here which are hybrids between common stock and bonds). There is more risk than bonds because it makes no promises whatsoever that it will go up in value or pay a dividend or make you any money and common stock owners are the last to be made whole in bankruptcy. Bonds are contracts that do make certain promises - it promises to return your principle + interest after a period of time and it gives you certain rights that do not exist for common stockholders in bankruptcy. This is "safer" and as a result risk is lower and so is the risk premium placed on bonds and your return is lower. If this decreased risk fits your own personal risk tolerance profile then they can be beneficial in a portfolio.
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Yes
EDIT: Not lately though.
I've never sold gold, just collect it over the years.
I sold all my platinum, and lots of my silver during the high several years back.
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A fixed income fund could be a ballast for your portfolio. Here is one that I have held for a long time. Right now it’s struggling but the MAX chart tells the story. I have gotten 10% plus income off this fund which I reinvested back into the holding.
https://finance.yahoo.com/quote/BGNMX/
https://finance.yahoo.com/quote/BGNMX/
15% is it's current yield at $17.83 . Now back in 2020 when it was $32 the yield was probably much less . As the price goes up ....... the yield goes down .
Yup...bonds 101.
Where do you get 15% yield average over 10 years. The chart I found showed it paid 3 to 6% over those years. Not bad for the time - but not 15%. There was the occasional special dividend every few years.
Current yield is supposedly a little more than 6%.
https://in.investing.com/funds/pimco-income-instl-historical-data-dividends
I thought Warstud stated 15% over 10 years but he said it’s at 15% and here’s the 10 year chart. I’m looking at this stuff on my phone at soccer games all day. My bad…
Finviz says the yield is 14.84 % . Monthly Div/ shr is .22
Dividend channel.com also says 14.84 %
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Different fund - PDI - also a pimco fund. Looks like this one invests in anything from Junk bonds to 3rd world sovereign debt. More volatile - might be better though if you can stomach the ride.
The one I referenced above was I believe there biggest. Still don't know why I would buy a bond fund over a treasury. But like I said, I am definitely not the smartest guy in the room
I like Pablo's idea of buying short term cd's from a brokerage
