Gyroscopic Investing

For those of you that have held back bond purchases, what is your entry price for TLT? Is it tied to a specific yield you would be looking for?

I have been out of long-term bonds for about 1.5 years, exiting at 3% (TLT was around 117).  I would consider getting back in (slowly) at yields above 4%, or at TLT<100.  There is no particular reason for these entry/exit points, other than gut feelings.

Austen Heller wrote: I have been out of long-term bonds for about 1.5 years, exiting at 3% (TLT was around 117).  I would consider getting back in (slowly) at yields above 4%, or at TLT<100.  There is no particular reason for these entry/exit points, other than gut feelings.

Last 12 months of dividends are $3.15.  So TLT needs to go to 79 to yield 4%.  Is that about right?  If so TLT has another 23% of downside.  I have some overweight in stocks and need to buy some gold and long term bonds.  IMO 4% yield would be a good point to enter considering the lower inflation that we have experienced recently. 

modeljc wrote:

Austen Heller wrote: I have been out of long-term bonds for about 1.5 years, exiting at 3% (TLT was around 117).  I would consider getting back in (slowly) at yields above 4%, or at TLT<100.  There is no particular reason for these entry/exit points, other than gut feelings.

Last 12 months of dividends are $3.15.  So TLT needs to go to 79 to yield 4%.  Is that about right?  If so TLT has another 23% of downside.  I have some overweight in stocks and need to buy some gold and long term bonds.  IMO 4% yield would be a good point to enter considering the lower inflation that we have experienced recently.

I am more concerned with the current yield on the 30-year T-bond, rather than the yield over the last 12 months.  If current yield is around 4%, then the TLT should be priced around 100.  I think that would be a good point of entry.  We are pretty close to that now (TLT=103.5).  I may start getting back in soon.  I am interested to see if there will be a lot of volatility in asset prices next week with all the Fed talk.

This should be in the VP section, shouldn't it?
After all, the solution in the bonds section is simply rebalancing bands.

dualstow wrote: This should be in the VP section, shouldn't it?
After all, the solution in the bonds section is simply rebalancing bands.

Maybe, but then is there any point then to the specific investment vehicle forums?  Other than maybe a single thread on options to invest in.

I put it here because I buy the trailing asset which is an accepted methodology for new funds.

Bean wrote:

dualstow wrote: This should be in the VP section, shouldn't it?
After all, the solution in the bonds section is simply rebalancing bands.

Maybe, but then is there any point then to the specific investment vehicle forums?  Other than maybe a single thread on options to invest in.

Well, without looking, I remember the gold section abounds w/ physical versus etfs, safe deposit boxes vs home safes, reasonable markups, coin transportation tips. Bond section addresses zeroes, what if 30-year bonds disappear again, what's under the hood of TLT, what if you want to buy corporate bonds because you disagree w/ the policies of the U.S. gov't, British gilts, Canadian bonds, and so on.

I put it here because I buy the trailing asset which is an accepted methodology for new funds.

It surely is.

I think double digits at least and an inverted yeild curve until I buy.

Everyone will have to be pretty sure the US would default for me to but......the prices are so high still.

If you have a moral objection to loaning the US money you might as well dump it's cash too and hold the bare min to get buy.

They really depend on everyone holding the cash.

Kshartle wrote: If you have a moral objection to loaning the US money you might as well dump it's cash too and hold the bare min to get buy.

They really depend on everyone holding the cash.

I think I do have a moral objection, but I also know it is very hard to fight the system.  This is why of all assets I struggle with bonds buys the most.

I struggle with them because at these low rates they just seem like a sure-fire long-term loser to me.

The rates need to swing to abnormally high or at least well above the annual money supply increase for me to dip my toes in.

When we start a thread called "The bond scream room" and the investment community is sure they are worst possible investment....I hope I'm smart enough to buy.

When 10 year bonds yield 4% real returns or more than the average earnings yield of stocks (currently around 5.2%) i will buy bonds again.

The beauty of the Perm Portfolio is you do not have to market time, you just buy when a re balance band is hit.  I am not going to make any predictions but a while back when everyone was talking about interest rates rising and long bonds should be sold, anyone who sold regretted it. There was a radio show on Sundays called The Rezny Wealth Report  , I remember how he said it was time to dump long bonds. A few months after my EDV holding was up 70% from the time it was recommended to sell. Just saying....