Boghies Account Talk

[Boghie]

Yesterday's bump and level action matched with todays fairly level behavior is a very good sign.
Everything has a price. Market behavior like this presents a baseline. I might move more to risk soon.

Even bonds might be a decent purchase now that they are earning something. All in all, maybe wait till after the next FED rate increase and stick more of my nose under the tent.

 

[Boghie]

Reallocating to Risk

It's time for Santa to start making toys. I think inflationary gubmint spending will be restrained to the level of a drunken sailor in a brothel. That is a step in the right direction

Fund Allocation Banal Thoughts

• G 40% - It's now earning a little bit, so
• F 0% - I think I will take this ride after the FED is off it
• C 30% - Statists prefer big business so I am bumping this
• S 20% - Statists don't like small(ish) businesses, they cannot influence them
• I 10% - The EuroTrash look worse than we do. Is this a permanent allocation. Yowser

Sciencey Stuff:

• Expected Annual Return: 7.72%
• Expected Risk: 9.37%
• Best Year: 23.66%
• Worst Year: -19.78%
• Biggest Dump: -31.24%

 

[Boghie]

It's Still Dumb Money Hour(s), but...

It's Still Dumb Money Hour(s), but...

This is why I am never out of the market:smile:...​

This market is churning without an actionable direction. It is not a good market timing market. Monday will likely see a drop.

The glee of only 7.7% inflation is completely stooooopid. The October 2021 inflation was 6.2% YoY. We were in the late stages of the beginning of the Helicopter Cash inflation mess. It got worse from there. So, we are looking at 13.9% inflation over the past two years. Yowser. Welcome back Kotter(Carter):nuts:. But, on the good side we have to accept that maybe the FED is slowing the growth of inflation.

Personally, I would have SWAGed inflation in 2021 at around 4% - 5%. That would have been higher than normal, but understandable. However, we got to 9.1% (YoY) and that was caused by Gubmint Spending. Hopefully the FED can yank enough fiat money out of the system to bring inflation down another 5% - 6%. That will not be a wonderful experience, but like amputating a limb it might be necessary.

GLHF

:ban:

 

[Boghie]

Re: It's Still Dumb Money Hour(s), but...

Prepping for the Santa Rally

Fund Allocation Banal Thoughts

• G 35% - It's now earning a little bit, so. The funny thing is that my Edelman advisor actually recommended this
• F 0% - There is still a LOT of Gubmint Spendulous sloshing around. The FED has to pull it out of the market
• C 25% - Statist love Big Business
• S 25% - Gridlock loves Small Business
• I 15% - I'll blame my Financial Advisor if this craps out

Sciencey Stuff:

• Expected Annual Return (CAGR/IRR): 8.20%
• Expected Risk: 10.26%
• Best Year: 25.17%
• Worst Year: -22.13%
• Biggest Dump: -34.57%

My Financial Advisor at Edelman Financial Engines didn't want me swining in a 20% range. We agreed on a 10% swing range centered at 65%. Personally, I'm good with that right now. Mr. Market will probably just camp it here till the Statists are voted out and the FED gets inflation under control. I don't think even this administration can look at current interest rates and just barf out more Free Money. All in all, this is only a 0.50% change in IRR and a 1% change in risk, so whatever...

 

[Boghie]

Santa Dropped a Deuce!!!

One hell of a Santa Clause rally we had there!!!

Go Team!!!

:nuts:

 

[nasa1974]

Re: Santa Dropped a Deuce!!!

One hell of a Santa Clause rally we had there!!!

Go Team!!!

:nuts:

It looks like most of us got coal.

 

[Whipsaw]

Re: Santa Dropped a Deuce!!!

Maybe he's late? :cheesy:

 

[nasa1974]

Re: Santa Dropped a Deuce!!!

Maybe he's late? :cheesy:

Must have had a flight on Southwest Airlines.

 

[Boghie]

Bonds Anyone???

Not ready to dive into the AGG (F) yet, but there will be a point...

Because the FED has to yank trillions of inflationary 'Treasury Bucks' out of the system they will keep raising interest rates. Not good for those on fixed incomes, those invested in bonds, or the poor. Actually, not good for anyone that has to eat either. Not good for someone that wants/needs to buy/sell a house. Kinda crap for anyone I guess. But, we apparently wanted this. In sports this is called an 'unforced error'.

Anyway, since our 'F-Fund' is a 'fund' there is a weighted maturation and thus a wieghted yield. The maturation is around 6 years the last I checked, the current yield is 2.44% if I am reading it correctly. The current FED rate is 4.75%. The newest bonds in the AGG should be a point or so higher than the FED rate. Thus, as the older bonds wash out the yield on the average should increase - and, at a faster rate than the FED increases.

This could be a GREAT market timing event. When the FED rate stabilizes - and especially when it starts dropping - there will be 'Happy Times' for bond holders.

 

[Boghie]

Why, oh Why...

Why, oh why do we keep seeing HSBC Bank and Credit Suisse in the news anytime there is a bit of bond trouble. Just asking for a friend.

Maybe that friend, or friends of that friend, or even friends of friends of that friend should take a good hard look at things if they hold money in those 'banks'.

 

[Boghie]

I'm Not a Bond Guy, But...

I'm not a bond investor, but somewhere down the line it will be wise to invest in bonds (F-Fund).

I think I might understand what an 'inverse yield curve' is now. I found an article mentioning that the yield on 2 year Treasuries is at a 16 year high. I think that is what I am looking for as a marker for investing in bonds. One thing of particular interest is the chart presented in that article:



My guess is that longer term treasuries should have a higher yield than short term treasuries. Anyway, once our F-Fund meets/exceeds the yield of the 10 year I think I will start putting money in the F.

Such a SWAG - but, I am not including the sciencey part:laugh:

 

[Boghie]

Math Is Hard

It doesn't appear as if the credit rating entities give one whit whether our politicians increase the Federal Gubmints credit limit or not...

We all knew in our heart of hearts that it really did not matter that Congress/President increased the credit limit. All that matters is math. Fitch doesn't appear to like the math. On our way to dead beat status.

Math might be taking precedence over politics. If it isn't now, it will soon.

And, you know what: Math is Fair and Equitable and Non-Racist and...

Ugh ;damnit

 

[Whipsaw]

Re: Math Is Hard

I've not messed with the F-Fund in a long time, nor really understood it either - considering price movement vice pay out. So, that said... with money sitting in the F-Fund, is there a visible deposit that shows up in the TSP someplace? I guess same for G-Fund for that matter. Is there a minimum time the fund must sit there? Hmmmmmmm.... :embarrest:

 

[Boghie]

Foreseeable Unforeseen Tragedy

Who could have seen this coming 'Mysterious rise in US Treasury yields perturbs markets', AFP.

Too damn funny. Unforeseen. Unexpected. WAT

Yet, they are guessing the following:

• Government Spending - that is Federal Fiscal 'Situation'
• Fewer Central Bank Federal Debt Buyers
• Fewer Domestic Bond Buyers
• FED Tightening

Unexpected.

Time to ramp up more gubmint stimulus. Maybe.

 

[Boghie]

2023 Has Been Good to Me, But it Jiggered my Allocation

The niceness of this years markets have jiggered my Allocation enough to warrant notification. This is the current reality:

Fund Allocation:

• G 31% - It is earning 5%, which is an OK return in a 3.2% inflation environment.
• F 0% - Just read a word salad AI robot article. But, one fact stood out: Market makers are covering for reduced demand for US Bonds. Not good.
• C 27% - Statist love Big Business
• S 26% - Gridlock loves Small Business. Glorious.
• I 16% - I'll blame my Financial Advisor if this craps out, but it hasn't - so, the Sun God Lion favors him

The AI word salad report also mentions that when the market makers stop their above normal buying of US bonds the FED will pick up the slack. The Treasury apparently needs to sell something like $10 Trillion in new bonds/treasuries to recycle old debt and to cover the expected 2024 splurge. Do I think the FED will buy if the market does not? Uh, nope. Expect higher interest rates. They ain't going to buy this crap to support gubmint spending. They don't have to. However, if one can time this 'Epic Fail' by our imbecilic betters - who are voted in because we voters are rather dumb too - will make loads of easy and safe money. However, if you buy now you will have your lunch money taken. 2022 and 2023 have been horrid for the F Fund, expect the same for 2024 if these morons we have voted into office continue to believe that if they increase the debt limit anyone will care.

 

[Boghie]

On Returning to the Normal

Folks, some of you are waiting for these high interest rates to decline. They shouldn't and they likely won't. They are normal interest rates - if not still too low.

Anyway, Joshua Kennon wrote a nice article on this: 'Thoughts on the United States Returning to a Normalized Interest Rate Environment, the Housing Market, and Related Topics', Joshua Kennon

It is well worth the read.

BTW, I actually found this chap when searching for quality shirts. I had purchased what I thought was quality stuff from a department store that had lasted about nine months. A normal work shirt (dress shirt) would last me about eighteen months or a bit less. I was not happy. His article 'Dress Shirts for Men 101' was a godsend. The links to various levels of shirts (some of which are broken, but you can find the new ones) of quality was priceless. His discussion on that topic is something I go back to often. Again, well worth the read. My Charles Tyrwhitt shirts last no less than five years and they are not expensive.

This chap is a wealth manager. He is very conservative. Take that for what it is worth.

 

[weatherweenie]

Re: On Returning to the Normal

So true about the interest rates. Unfortunately, rates were so low, for so/too long, that people got used to/expected them to continue. That is one of the reasons for the inflation we have/had. Fortunately, there are adults now in the room that are handling things properly.

Folks, some of you are waiting for these high interest rates to decline. They shouldn't and they likely won't. They are normal interest rates - if not still too low.

 

[Boghie]

Re: On Returning to the Normal

Not feeling it and made a good return so far - being an old guy who is no longer playing the game like a sweaty try harder

Fund Allocation:

• G 50% - I'll just call it 'Going away in May' and call it a day.
• F 0% - This fund of bonds still sucks. It just ain't behaving right. All those low return bonds gotta get washed out before I invest in this.
• C 25% - Statist love Big Business
• S 15% - Gridlock loves Small Business. Glorious.
• I 10% - The Developmental Window Lickers lumped in here seem to have some legs. However, they all get smileys.

Metrics (from 'Backtest Portfolio Asset Class Allocation'):

• Expected Return (CAGR/IRR): 7.52%
• Expected Risk: 7.82%
• Meaning that 67% of the time the annual return will fall between -0.30% and +15.34%
• Best Year: +21%
• Worst Year: -16%
• Worst Drawdown: -25%

I don't know what the rest of the year will do, but I do know that I don't want to participate in the chop.

 

[tsptalk]

Re: On Returning to the Normal

Hey Boghie,

I entered your IFT. See your private messages regarding autotracker login.

Good luck!

 

[Boghie]

Adding a little risk to the equation. Being an oldster, and wanting to avoid eating the Bargain Alpo, I am holding a rather sizable amount in the G-Fund. After mathing it out I need to have about 40% of my current holdings in the G-Fund to support me and my trophy wife for seven years. So, if I decide to 'peace out' after a particularly nasty or boring day I can draw from cash holdings for seven years and let the market recover. I am arrogant enough to believe that me 'peacing out' will dump 'Merica into the Greater Depression. If the worse doesn't happen, I can just let that 60% churn and grow while I sleep happily.

Fund Allocation:

• G 40% - I'm now an oldster looking at a choice of gold watches. This is enough 'cash' for 7 years.
• F 0% - This fund of bonds still sucks. It just ain't behaving right. All those low return bonds gotta get washed out before I invest in this.
• C 30% - Overweighting for stability. Still seems to offer significant growth
• S 20% - I think small to medium size business will do well. They will be allowed to innovate
• I 10% - It kinda looks like EuroTrash money is moving to 'Merica, but this should start growing

Metrics (from 'Backtest Portfolio Asset Class Allocation'):

• Expected Return (CAGR/IRR): 7.99%
• Expected Risk: 9.37%
• Meaning that 67% of the time the annual return will fall between -1.38% and +17.36%
• Best Year: +24%
• Worst Year: -20%
• Worst Drawdown: -31%

BTW:
I cannot update the AutoTracker. It keeps telling me my session has expired. I think I am being blocked at work. Ugh.
And, the new forum looks great. Great job