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Re: The names Bond.
Posted: Wed Feb 14, 2024 1:55 am
by Tsumitate Wrestler
Deep Blue wrote: ↑Tue Feb 13, 2024 10:04 pm
Tsumitate Wrestler wrote: ↑Tue Feb 13, 2024 2:59 pm
I am speaking of bonds here, not equities. A concentrated bond purchase at a low yen-usd could take decades to recover. I am simply advocating a more cautious approach, and not applying the risk-free language that is used by investors when mention bonds in USD terms (or any domestic bond-currency pair).
Bonds, equities, same risk la. Buy an S&P500 tracker and the world goes into recession, Fed cuts aggressively and yen goes back to 100 while the S&P falls 50%. You’re going to be waiting a while to recover your yen notional.
At least with offshore bonds they’re likely to do a lot better in a yen appreciation scenario than equities, from this starting point.
I disagree. Bonds have a capped upside, the yield and coupon. Equities do not.
Re: The names Bond.
Posted: Wed Feb 14, 2024 7:01 am
by sutebayashi
myindex.jp has the data to show how foreign stocks and foreign bonds performed during recent market crashes.
Re: The names Bond.
Posted: Wed Feb 14, 2024 9:52 am
by Tsumitate Wrestler
sutebayashi wrote: ↑Wed Feb 14, 2024 7:01 am
myindex.jp has the data to show how foreign stocks and foreign bonds performed during recent market crashes.
It's hard to find a resource that helps compare this sort of data, when taking currency and dividends into account.
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To illustrate the differences (Roughly).
We can treat 2512 as bear yen, and 2611 as bull yen. (Same indexes, one is hedged, both excluding dividends)
The bear is up +7.38% and the bull down -21.11% over 7 years.
{For comparison over the same period BNDW is down -10% (excluding dividends).
https://g.co/finance/BNDW:NASDAQ?window ... TYO%3A2512
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I'm just saying that the "ballast" effect and the "inverse" effect bonds are credited with are a bit overstated, there is still a lot of volatility.
Re: The names Bond.
Posted: Thu Feb 15, 2024 10:07 am
by Bubblegun
Well this is much more complicated than I ever thought. I wonder if bonds are better for big pension funds, knowing that some people will die before they ever claim more than the companies can pay out. and they''ll also have the younger workers buying more bonds k owing there is maybe a 20-year period before they will have to claim or withdraw the funds. So, i still seem no clearer on whether to buy bonds since i don't have a 20,30 years time frame.
I wonder if it might be better to just ride any storms out, and adjust fiscally as we get older. its not like we're looking forward to world cruises, travelling first class on planes. Just a plain normal retirement.
Re: The names Bond.
Posted: Thu Feb 15, 2024 11:56 am
by Beaglehound
If you're not confident about what allocation is suitable for you, a target date fund might take some of the stress out of it. These will automatically rebalance to reduce risk as the target date approaches. They tend to have higher fees than the emaxis funds but not horribly so.
Re: The names Bond.
Posted: Thu Feb 15, 2024 12:16 pm
by sutebayashi
Bubblegun wrote: ↑Thu Feb 15, 2024 10:07 am
i still seem no clearer on whether to buy bonds since i don't have a 20,30 years time frame.
I think you ought look at your portfolio in its entirety.
That is where myindex.jp is quite nice, as you can play around with different asset allocations and see what having different asset classes typically does to your portfolio performance.
You can try out a portfolio with zero in bonds, and then try adding in some bonds.
It’s all past data, and past data is no guarantee of future performance as the disclaimers say, but what else do we have to go on.
I wonder if it might be better to just ride any storms out, and adjust fiscally as we get older. its not like we're looking forward to world cruises, travelling first class on planes. Just a plain normal retirement.
If you think you’ll have enough to be able to afford such a luxury, that’s the way to go probably. But if things might get tight in retirement, one might want to do some more number crunching to figure out what performance you need from your portfolio, and what degree of risk you are comfortable taking to get it.
Re: The names Bond.
Posted: Fri Feb 16, 2024 1:01 pm
by Bubblegun
sutebayashi wrote: ↑Thu Feb 15, 2024 12:16 pm
Bubblegun wrote: ↑Thu Feb 15, 2024 10:07 am
i still seem no clearer on whether to buy bonds since i don't have a 20,30 years time frame.
I think you ought look at your portfolio in its entirety.
That is where myindex.jp is quite nice, as you can play around with different asset allocations and see what having different asset classes typically does to your portfolio performance.
You can try out a portfolio with zero in bonds, and then try adding in some bonds.
It’s all past data, and past data is no guarantee of future performance as the disclaimers say, but what else do we have to go on.
I wonder if it might be better to just ride any storms out, and adjust fiscally as we get older. it's not like we're looking forward to world cruises, or travelling first class on planes. It's just a plain normal retirement.
If you think you’ll have enough to be able to afford such a luxury, that’s the way to go probably. But if things might get tight in retirement, one might want to do some more number crunching to figure out what performance you need from your portfolio, and what degree of risk you are comfortable taking to get it.
Thank you for your link. That was interesting to play with and warrants more research.
If I consider including my government pension and work pension, would it be reasonable to consider them the same as a bond allocation? 1) They are fixed. 2) They will rise every year, based on the higher figure and are indexed linked. 3) They are safe, apart from currency fluctuation, which bonds would also be subject to.
As you said it's all past data, and let's face it, every single financial company, Youtuber, blogger, or podcaster uses the same data.
And the lawyers and financial advisors use them as a get-out clause.