Investing General Discussion

Foler

Asshat Foler

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How many of you hold bonds as part of your portfolio? If so, what is your reasoning? Do you have i bonds?

edit - my professionally managed portfolio has the following bond funds making up 27% of it. I’m considering reducing it. I have no foreseeable large purchases in the next 3 years and have a nice emergency fund.

IMG_3836.jpeg
 
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Rangoth

Rangoth

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Dude, I’m not pro lulu, but they also own athletica I believe. This is a swing trade on a company that whether you like them or not, does actually produce a profit. I believe they are beat down harder than they should be, that’s the bet. I don’t plan on holding for years because I think Lulu will rise supreme. :)

my play is that I believe they can make 1 ATR move back up within a month.
 
Falstaff

Falstaff

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Rangoth said:
Dude, I’m not pro lulu, but they also own athletica I believe. This is a swing trade on a company that whether you like them or not, does actually produce a profit. I believe they are beat down harder than they should be, that’s the bet. I don’t plan on holding for years because I think Lulu will rise supreme. :)

my play is that I believe they can make 1 ATR move back up within a month.
Click to expand...
Gap owns Athleta.
 
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Tmac

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Foler said:
How many of you hold bonds as part of your portfolio? If so, what is your reasoning? Do you have i bonds?

edit - my professionally managed portfolio has the following bond funds making up 27% of it. I’m considering reducing it. I have no foreseeable large purchases in the next 3 years and have a nice emergency fund.

View attachment 590806
Click to expand...

STRK is a bond esque investment that promises 8% return. It’s an offering from Strategy who does MSTR.
 
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Sanrith Descartes

Sanrith Descartes

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Hasn't the forecast been pretty steady at 2 rate cuts by year end?



7 Fed officials see no rate cuts at all in 2025
2 Fed officials see 1 rate cut
8 Fed officials see 2 rate cuts
2 Fed officials see 3 rate cuts
 
Jysin

Jysin

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The rate cut projections have been steady, however, the recent inflation surprises to the downside has made a growing call for Fed to lower rates.

I believe the Fed is rightfully concerned about impacts from tariffs, particularly as no deals are finalized. The last thing they want to do is lower to appease Trump and then tariffs rip inflation higher again. We also have a ton of US debt to refinance this year and next, but a ballooning deficit is going to press rates up via the bond market itself. There are a lot of moving parts and no easy solutions.

I still think we need to rip the bandaid off Volker style and get this big reset we need vs muddling through half a decade now of uncertainty.
 
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Lambourne

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NATO summit is next week and if they're going to agree on a 5% spending target as expected, that means an additional 1.5-2% of GDP of spending for the US. They're probably hoping to offset some of that pain with increased arms sales but it's likely just going to balloon the deficit further.

Think all hope that this administration was going to reign in the deficit has left the market.

 
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Gravel

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Jysin said:
I still think we need to rip the bandaid off Volker style and get this big reset we need vs muddling through half a decade now of uncertainty.
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Is that possible without bankrupting the country? See the above post about how treasuries are almost at junk bond territory.

Volker style rates means we're spending 50% of our budget on debt service.
 
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tugofpeace

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Gravel said:
Is that possible without bankrupting the country? See the above post about how treasuries are almost at junk bond territory.

Volker style rates means we're spending 50% of our budget on debt service.
Click to expand...

If anything that would make it more clear than ever that we need to cut bullshit spending. Rates at 20%? Holy moly, we need to be paying down debt, we can't afford this war with Iran, we can't afford all this welfare, etc etc
 
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Flobee

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Gravel said:
That's a good point, but we were at that point 4 years ago and we just kept spending.
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Only way out is default, and that happens through a hard default (sorry US won't be paying you what is owed) or soft default (brrrrrrr). No country that could print its own currency has ever chosen to hard default. Invest accordingly imo
 
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Foler

Asshat Foler

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Flobee said:
Only way out is default, and that happens through a hard default (sorry US won't be paying you what is owed) or soft default (brrrrrrr). No country that could print its own currency has ever chosen to hard default. Invest accordingly imo
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So you’re saying don’t invest like a bear?

I’m about to decrease my bond position from 15% to 8-10%
 
Flobee

Flobee

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Foler said:
So you’re saying don’t invest like a bear?

I’m about to decrease my bond position from 15% to 8-10%
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I'm no expert, but I wouldn't want to hold the debt of an entity that will be forced to maintain negative real rates while they "grow" out of a ~$36 trillion hole. You may end up in the "green" nominally, but in real terms you're going to get wiped out. Someone has to lose in this set up and I would bet its going to be bond holders. Also in either default scenario its bond holders that get wrecked the hardest. My 2c

EDIT: Just a note, this wouldn't apply to setting aside "cash" amounts in short term treasuries or a money market fund, thats just earning some yield with cash you plan to hold anyway. This is mostly about holding long term treasuries or an instrument like TLT.
 
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Furry

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Flobee said:
Only way out is default, and that happens through a hard default (sorry US won't be paying you what is owed) or soft default (brrrrrrr). No country that could print its own currency has ever chosen to hard default. Invest accordingly imo
Click to expand...
Hard default usually leads to civil war enforcing it again, with rare exception. Debt is a powerful thing. Soft defaults are far more likely. Some could argue that we've been within one for a while with QE, where the default only need accelerate.

That said, we can continue down this grotesque excess of spending for quite a while without making major adjustments. This is a decades on the horizon problem. We certainly aren't making it better by letting it loom though. A painful fix now will be a catastrophic fix later.
 
Sanrith Descartes

Sanrith Descartes

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Sold the entirety of my MSFT and TOPT positions. MSFT has been on an amazing run and RSI has been over 70 for more than a month. I love the stock but this is just time to sell and take the profits. I will re-enter it at some point in the future. TOPT has been driven in large part by NVDA and MSFT runs. My belief is signs are pointing to Trump taking out Fordrow this weekend (probably tonight/tomorrow) while the markets are closed so he can soothe them on Sunday before the open. This is strictly market timing which I generally piss on and it could very well bite me in the ass. But, I am trading what I see in front of me. These are my second and third largest positions.
 
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