Huh?
Hugh Jass wrote:
So it's only unfortunate for people buying today. That's a rather small sample size.
Hugh Jass wrote:
I'm not saying valuation isn't important, but an investor's bottom line depends on stock prices. Up is good.
At the close of Q4 2016 (12/31/2016) the non-GAAP consensus EPS for S&P 500 was $30.48. Currently the quarter is tracking at non-GAAP $28.37. Expectations for full year 2017 was $130.92 on 12/31/2016, is now marked down to $130.68. The individual quarter breakdown is a fantasyland romp of Q1 $29.60, Q2 $31.99, Q3 $33.88 and Q4 $35.21. GAAP numbers show even more multiple expansion moving from 23.62 a year ago to 24.70 using a 12/31/2016 close of S&P 2,238.83.
agip wrote:
article in the WSJ says that the forward PE for sp500 is 18.1. Which is very high
but if you take out oil, it's only 16.6
Which explains some of why the market is rising even with a high multiple
So are you saying that people who have been invested for the past 5 years are going to be feel the impact of a 10% drop more so than the ones who have been sitting on the sidelines in fear of what the OP predicted.
Pleazse wrote:Hugh Jass wrote:Huh?
So it's only unfortunate for people buying today. That's a rather small sample size.
If the market tanks now everyone invested takes the ride down.
Especially those with a lot invested -- more likely to be those who have been in for a long time.
The 10 Year Treasury hit a 52 week low of about 1.35% July 8, 2016. Since that time your have seen a falling NAV for all three funds. However, the duration of portfolios on the long end were most impacted. Using closing NAVs for 7/8/2016 and yesterday's close the impact is as follows:
agip wrote:
re; whether hiding out in short term bonds is safe
So far this year...no.
Year to date
BSV (short term bonds) +0.64%
BIV (intermediate bonds) +1.31%
BLV (long term bonds) +2.79%
Again, the Fed only affects short term rates, not intermediate and long term rats. owning short term bonds does not guarantee safety in a rising interest rate enviro.
obviously you have to look at total return - makes no sense to look just at NAV
Ghost of Igloi wrote:agip wrote:The 10 Year Treasury hit a 52 week low of about 1.35% July 8, 2016. Since that time your have seen a falling NAV for all three funds. However, the duration of portfolios on the long end were most impacted. Using closing NAVs for 7/8/2016 and yesterday's close the impact is as follows:
re; whether hiding out in short term bonds is safe
So far this year...no.
Year to date
BSV (short term bonds) +0.64%
BIV (intermediate bonds) +1.31%
BLV (long term bonds) +2.79%
Again, the Fed only affects short term rates, not intermediate and long term rats. owning short term bonds does not guarantee safety in a rising interest rate enviro.
BSV $81.09 $79.80 a drop of -1.59%
BIV $88.54 $83.78 a drop of -5.38%
BLV $101.24 $90.69 a drop of -10.42%
Fed policy may move the lower end of the curve, but expectations for the future rates are driven as well. And since the duration of longer term bonds is greater, the magnification is greater. Granted, the higher return cushions some of that blow, nonetheless the loss of market value is real as illustrated above.
total return for 1 year
agip wrote:Ghost of Igloi wrote:obviously you have to look at total return - makes no sense to look just at NAVagip wrote:The 10 Year Treasury hit a 52 week low of about 1.35% July 8, 2016. Since that time your have seen a falling NAV for all three funds. However, the duration of portfolios on the long end were most impacted. Using closing NAVs for 7/8/2016 and yesterday's close the impact is as follows:
re; whether hiding out in short term bonds is safe
So far this year...no.
Year to date
BSV (short term bonds) +0.64%
BIV (intermediate bonds) +1.31%
BLV (long term bonds) +2.79%
Again, the Fed only affects short term rates, not intermediate and long term rats. owning short term bonds does not guarantee safety in a rising interest rate enviro.
BSV $81.09 $79.80 a drop of -1.59%
BIV $88.54 $83.78 a drop of -5.38%
BLV $101.24 $90.69 a drop of -10.42%
Fed policy may move the lower end of the curve, but expectations for the future rates are driven as well. And since the duration of longer term bonds is greater, the magnification is greater. Granted, the higher return cushions some of that blow, nonetheless the loss of market value is real as illustrated above.
Not really. That would only be true if two investors bought at different times in a rising market, but sold at the same time. Someone who buys at $1 and sells at $2 gets the same return rate as someone who buys at $2 and sells at $4. It's pretty simple arithmetic.
Ghost of Igloi wrote:
Pretty simple concept actually, your return is inversely correlated with the price you pay.