Bob Brinker Free Discussion Site 59,820+

Top 81. Mar 4, 2005 9:04 AM

» honeyoneohone - Re: BTW: Aromme188

In response to Re: Re: Re: BTW: Aromme188 posted by Kirk:

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Thanks! smile

I too, enjoyed the discussion with Aromme--I also enjoy all of his posts on the other threads.

I agree with you about the bond market right now, but I made good money over the past couple of years with High Yield Funds.

I held the short term, more conservative, STHBX when High Yield Funds were taking a beating during 2003, then I sold it and bought the higher risk STHYX, believing that it would rebound at a much faster rate than the conservative fund--it did.

I didn't like the fact that Strong was involved in that "insider trading" of mutual funds, so I switched to NHFIX and made more NAV gains. All this time, I collected large dividends--which was the purpose for owning them all along.

I am now completely out of High Yield Funds, but may go back in if there is a significant correction.

I've never agreed with Brinker about junk bonds, real estate, or REITS. In all three of these subjects, he has either changed his mind or been shown to be wrong.

-- posted by honeyoneohone

Top 82. Mar 4, 2005 9:36 AM

» azxcvbnm - Re: Re: BTW: Aromme188

In response to Re: BTW: Aromme188 posted by honeyoneohone:

I've heard some conflicting opinions on junk bonds and funds. On one hand, I've heard that junk bonds do not compensate the holder enough for the risks taken. And I've also heard that junk bonds over compensate the holder given the risk, and are a good investment. What do studies on this topic say? Are there any?

-- posted by azxcvbnm

Top 83. Mar 4, 2005 9:52 AM

» honeyoneohone - Re: Re: Re: BTW: Aromme188

In response to Re: Re: BTW: Aromme188 posted by azxcvbnm:

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I'm not aware of any credible studies on the subject. I think that because of the disaster that happened to them in the late 1980's (or early 1990's), they still get a bad rap. I think that the fact that they are referred to as "junk bonds" scares people off from them.

They react almost as much to the stock market or bad economic news as they do to interest rates, so they CAN actually be less risky than either stocks or other bonds.

When you compare the money market rates to the High Yield Fund dividends, it is a very nice compensation, if you have the stomach for NAV fluctuation.

The dividends have dropped lately, so the difference between them and other bonds is not as large as it was earlier. This is why I have sold mine for the time being. Caution: My crystal ball is full of cat hair. smile

-- posted by honeyoneohone

Top 84. Mar 4, 2005 10:19 AM

» arommel88 - Re: Re: Re: BTW: Aromme188

In response to Re: Re: BTW: Aromme188 posted by azxcvbnm:

You know its hard to say. One thing I have noticed is that high yield lost capital appreciation for about 5 years. First it was interest rates and then it was defaults. However a weak recovery seems just right where companies stay afloat and interest rates stay cool. That is why I have held some. However I would just look at history and they are in the ball park. However they can be over sold like anything else and after 5 years of capital losses they seemed cheap.

If your bet is on stagnation and weak recoveries then it is one way to go.

-- posted by arommel88

Top 85. Mar 6, 2005 8:02 AM

» diane48 - dca long term investing

i have chosen to invest 20% in stocks and 80 % in bonds. i am only 14% in stocks now. i was wondering what people think about waiting for a correction or dca now into the market. this is a long term investment. i am 57 years old
what is bob brinker saying on the radio/newsletter.

thanks for the input

diane

-- posted by diane48

Top 86. Mar 6, 2005 8:22 AM

» allancoleman - Re: dca long term investing

In response to dca long term investing posted by diane48:

bob is still saying to dollar cost adverage at these market levels into the market with your new money . the only time in the recent past that bob suggested to lump sum buy into the market was at or below S & P 1100 .

if it were MY money , i would wait for a correction or pull back in here before i even dollar cost adveraged back into the market . i just made a major , for me , asset allocation shift from 80% stocks to 10% stocks at the market close friday nite .

in my personal account i went from ( - $ 75k ) in the hole ( negative ) year to date return on january 24th to + $ 21k return this last friday . so i've made over + $ 96k in the last six trading weeks and only have + $ 21k to show for it .

it's been a brutal market diane . i will sit it out for awhile now to await Sy Harding's " favorable season " next fall . ? ? . good luck in your own market call .

-- posted by allancoleman

Top 87. Mar 6, 2005 8:51 AM

» honeyoneohone - Re: dca long term investing

In response to dca long term investing posted by diane48:

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Diane...Bob Brinker was on the radio for three hours yesterday and will be on for three hours today--but I think you know that. smile

Trying to time the market is like trying to catch a fish with your bare hands.

But since you asked for opinion, here is mine: I think you are way overloaded with bonds in light of the interest rate increases that are expected.

And as far as the stock market, you say these are long term investments. That pretty well says it all.

Personally, I prefer dividend paying stocks right now. Dividends help offset the "corrections" somewhat.

Look into DVY...

-- posted by honeyoneohone

Top 88. Mar 6, 2005 9:17 AM

» AL_W - Re: dca long term investing

In response to dca long term investing posted by diane48:

Diane, only you can answer that question? If you loose 30% of that 6%, will that effect your ability to keep a roof over your head 5 years out? If yes, stay out. If no, get in. Over the long term, you will most likely always gain from being in the market.

Personally, I would NOT at this time lump money into high Beta investments. I am putting money into some lower Beta investments right now. You indicated Bob's newsletter. Bob lists his recommeded's beta's.

-- posted by AL_W

Top 89. Mar 6, 2005 7:31 PM

» diane48 - dca long term investing

the only reason i am in 80% bonds is because according to some statistics i have read, i should get the vast majority of the benefits of an up market with just 20% stock. i just recieved a windfall which brought my 20% stocks down to 14% and have been waiting for the right time but am not having much luck. that is why i thought i should just DCA. i guess it is a small decision. as for the bonds, i am in bond funds and am willing to have an off year since i am letting the income buy more funds.
i am semi retired and do not want to watch a correction and have 50% of my money in stocks. i am almost at critical mass.
diana

-- posted by diane48