Down goes the Dow

Pretty much what I'm doing.

That only works to the extent that (a) tax rates remain the same, (2) the currency remains stable, and (3) inflation is at a certain level through the holding period.

Look at the USD, the DXY is at 112.73 as I write this. Fair enough to have some bonds/cd’s/gic’s in a currency in which you will be paying taxes or in which you will transact, but the USD could drop 10% vs basket in 6 months. It takes a long time to make that up at 4%. For anything other than spending needs, one is betting on a currency direction.

Not to mention inflation. I assume those GIC’s are Canadian, meaning they currently have a substantially negative real rate of return. One is betting that inflation will come down, and substantially—and maybe quickly, depending on the term.

And taxes. You are somewhat in control, but not totally. Here in the US T-bills are exempt from state tax, so there’s that—but tax will lower your (already negative) ROR.

Having said all that, I am considering getting an array of 6 month to 5- or 10-year products. How much and the shape of the array are the questions.

Question for agip, do you buy funds or specific corporates, and if specifics, do you also buy an interest in the associated equities?

When I think of these returns—say 4% per annum after tax, interest paid every 6 months at a constant rate—I think of dollar amounts, how to achieve them, and the risk involved.

Say you plunk down 100k on a 5-yr note. That gets you what, 4k/yr? For tying up (and risking) 100k? Seems that I could make that pretty quickly, even in my old age, by working a joe job, which I might actually enjoy—and not risk the 100k.

But then what to do with the 100k instead? Is there something less risky than the USD/full faith and credit? It’s a real question, especially for those of us who live in non-USD countries, especially with the USD at nosebleed levels.

From September 2007 to March 2009 was a long way down; less than half way to the lows of that cycle. Whether intended or not, I think that is about right.

I use exclusively exchange traded funds

All of those things remain precisely the same for stocks, ETFs, bonds and the like. Not sure I understand the real point of your argument. I understand these investments could lose against inflation, and depending on how I buy them they may be taxed. Same if I buy something else. The difference is that the return on equity is guaranteed. The price I pay putting some money there is that it is tied up for a specific term (so I wouldn't want to do this with money I might need to get at) and there is no chance of higher returns.

Pick your poison... somewhere between, keep your money off the table, put half your money on black or gamble all your money on 00. I'm putting a bit of my money on black and keeping the rest in my pocket, since I'm on the cusp of retirement and wanting to spend it. For the younger folks on here, hell, why not throw a bunch on 00?

VIX finally woke up today...up to 32.

and the CNN Fear and Greed Index finally made it back to 'extreme fear.'

good.

Has to happen before this ends.

Here's a question for you gents.

Let's say high yield ETFs get to a 10% yield. Would you then sink a lot of money into them?

or pick a number...is there a yield that would get you interested in junk bonds? You could just do short term junk (SJNK) if you think there may be many defaults.

I've always thought that at some very bad moment in economic history, putting a large piece of cash into junk bonds would probably be a great idea. You get those big dividends plus cap appreciation if the world doesn't end.

Maybe we're close to that. Just would be so cool to get giant checks every month instead of 1.8% from stonks. I like the idea of income, cash flow.

High yield made 40% in 2009, after the GFC. then 12% the next year.

Morningstar says short term junk fund SJNK yields 8% right now. Not sure if that is accurate.

I asked a question related to a Hussman tweet about SPX. Iggy chose to avoid the question.

I wasn’t making an argument, so much as pointing out that instruments often advertised as “risk-free”, are anything but.

excellent. we made it another day above the june low, and measures of fear moved up massively today.

bonds held in there today. Down but just 20 bps or so.

and the yield on the 10 year actually fell today.

People will start to see value in a 4-5% yield and buy bonds. We need a stable bond market if anything is going to work.

next catalyst is the Sept 30 PCE report. Fed nowcast has us at an annualized run rate below 4%, based on the most recent readings. Hoping to actually get that.

Earnings Scorecard: For Q3 2022 (with 10 S&P 500 companies reporting actual results), 6 S&P 500 companies have reported a positive EPS surprise and 7 S&P 500 companies have reported a positive revenue surprise.

Which ETF(s) for the junk bond exposure, if I may inquire, please?

May look into them over the weekend, and tia.

I haven't done a recent review of what's out there....

but in the past I've used

SJNK for short term bonds

and HYG and JNK for longer term bonds.

Seems to me SJNK might be the play here, to keep duration low. The extra yield from HYG or JNK probably isn't worth the extra risk.

Interesting thing is that SJNK has done quite well this year, relatively. Down around 8% vs -7% for higher quality short term bonds and -13% for bonds in general. Something is working in junkland. I mean with 8% inflation the value of their debt has depreciated sizably. That probably matters.

Thx.

I've been in this thing called Invesco Preferred ETF (PGX) for a few years now. It pays dividend on 5.8% annually, but the share price has dropped enough that I am certain it wiped out any gain therein.

iBonds have been good so far but there are limits to how much one can get, even with some workarounds like gifting, etc.

:-)

From the same FactSet report:

“As a result, estimated earnings for the S&P 500 for the third quarter are lower today compared to expectations at the start of the quarter. On a year-over-year basis, the index is expected to report its lowest earnings growth since Q3 2020.

In terms of estimate revisions for companies in the S&P 500, analysts have lowered earnings estimates for Q3 2022 by a larger margin compared to recent quarters and the 5-year average. On a per-share basis, estimated earnings for the third quarter have decreased by 6.3% since June 30. This is the largest decline in the quarterly EPS estimate for a quarter since Q2 2020.”

Ha, ha, ha…..oh, ha, ha, ha…ha, ha, ha……

^ Somebody’s triggered. ^