The_Technician
Active member
F fund seems to be solidifying its position.....looking for a mediocre day or so and then it seems it could be on its road to better returns.....
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Direction of F Fund ?
- Thread starter GTO1970
- Start date
The_Technician
Active member
Last week I observed the AGG seemed to fluctuate around some stop loss snitching.....yep, thats when knowledgeable investors drop the price to snitch massive stop losses priced lower than going rates right before a jump in the equity.....happened numerous times last week...
Nice return Friday...I wouldn't discount a further jump in the AGG over the next year at this point......
Nice return Friday...I wouldn't discount a further jump in the AGG over the next year at this point......
The_Technician
Active member
I don't think the F fund is going to give any up if any of ya are looking for a break to jump in.........she's looking strong....
AllexBancs
Member
This is the last fund I want 2 invest in when Mr. B is still raising rates. You are not getting a good risk reward situation here IMHO.
AB
AB
AllexBancs
Member
Thanks Tom. All is well here. I haven't been to the site in ages. Looks great and many many more members. Keep up the good work. Goo luck with the allocation you went with today.
A lot of people seem to think that the F fund is going to be the place to be for a while, but consider this:
A month or so ago, a few people on this board pointed out that bond yields tend to rise to the fed funds rate, and then move up and down around that number. Sure enough, the Fed went to 5% and bond yields are now cycling up and down around that number. A move by the Fed to 5.25% this month is now a virtual certainty. Bond yields will follow and bond prices sink to a new level. A month from now we will be used to bond rates hovering around 5.25% and bond price levels that are lower than today.
Right now seems to be a very bad time to go F fund, the pressure is to push bond prices down and yields up. Other than short term plays, I think the F fund will be bad until the new equilibrium is reached, possibly a few weeks from now.
A month or so ago, a few people on this board pointed out that bond yields tend to rise to the fed funds rate, and then move up and down around that number. Sure enough, the Fed went to 5% and bond yields are now cycling up and down around that number. A move by the Fed to 5.25% this month is now a virtual certainty. Bond yields will follow and bond prices sink to a new level. A month from now we will be used to bond rates hovering around 5.25% and bond price levels that are lower than today.
Right now seems to be a very bad time to go F fund, the pressure is to push bond prices down and yields up. Other than short term plays, I think the F fund will be bad until the new equilibrium is reached, possibly a few weeks from now.
FUTURESTRADER
Active member
Pilgrim said:
I agree. Watch the 10 yr yield
Just to play devil's advocate here, the bond market, like the stock market, is a forward looking indicator. They price in future rate hikes before the Fed moves. If there is any chance the Fed will pause or even lower, the bond market will tell us first. The June hike is almost completely priced into bonds already.
FUTURESTRADER
Active member
damn, if you're right Tom, and I think u are, looks like the F fund is looking for 5.5 at least on 10 yr...down .05 today!...I don't think I've seen that much of a delta before...+ or -???
Pilgrim said:
Natuarally, I ignored my own advice, put some into the F-fund, and am losing it today! Things will not get better:
Last Update: 10:40 AM ET Jun 22, 2006 (excerpts)
NEW YORK (MarketWatch) -- Treasury prices drifted lower Thursday morning, pushing yields higher, as traders positioned for a widely expected increase in the fed funds rate next week to the 5.25% level.
Because the Fed is widely expected to lift the overnight rate to 5.25%, traders are sending prices lower and pushing yields up to that level ahead of the event.
Barclays Capital Economists Dean Maki, Bulent Baygun and Michael Pond now are projecting that the fed funds rate will hit 6% by the end of the year. Previously, the three economists had expected the fed funds rate to stall at 5.5% after the August meeting.
"The change is driven by recent upward revisions to our core consumer inflation forecast and by our view of the Fed's likely reaction to the combination of those higher core inflation figures and continued robust growth," the economists said in a note to clients Thursday.
They also predicted long-term rates will move higher and that the yield curve will invert further this year.
"We have become less convinced that the FOMC will be comfortable keeping rates at 5.5% after August as growth remains strong and core inflation continues to move higher," they said.
FUTURESTRADER
Active member
Aren't 'diversification' and L funds wonderful 
. I'd say the few minutes a day to guide your portfolio are worth it.
. I'd say the few minutes a day to guide your portfolio are worth it.FUTURESTRADER
Active member
10 yr yield intraday high 5.23%, just in time for that .25 rate hike, funny how that works . F fund falling in inverse lock step. 10 yr rate rises, u.s. dollar rises, I fund falls. Question is are we going to 5.5%, continuing pressure on F F fund and and to a lesser extent, I fund?
. F fund falling in inverse lock step. 10 yr rate rises, u.s. dollar rises, I fund falls. Question is are we going to 5.5%, continuing pressure on F F fund and and to a lesser extent, I fund?Bonds down again!! Believe it or not, CNN reports investors are beginning to price in the possibility or a greater than 25 basis point increase. Is this just speculation and a little fear, or a case of Tom's "the market knows before we do."
CNN Money - June 26 2006: 10:12 AM EDT
"Treasury prices slipped as investors speculated that the central bank may raise interest rates more than a quarter percentage point to combat inflation and that it could raise rates again at its August meeting."
CNN Money - June 26 2006: 10:12 AM EDT
"Treasury prices slipped as investors speculated that the central bank may raise interest rates more than a quarter percentage point to combat inflation and that it could raise rates again at its August meeting."
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