What about a MYGA (Multi Year Guaranteed Annuity) as a bond alternative? It's my understanding that it acts like a CD in that it matures in a certain number of years and you can build a MYGA ladder, but it pays slightly more than a CD. Maybe you could add MYGAs to your (long) list of future video topics 🙂 I'd especially like to learn more about pros/cons of MYGAs inside an IRA. BTW, I love your videos and I'm learning a lot!
As a new investor it's always great to hear from a person who has gone through all the difficult times and come ahead of it. It's unnerving to see your portfolio go from green to red but as mentioned if you have invested in quality names just have to keep adding to them and stay the course.
Don't sell off for the sake of selling to try to time the bottom... that's gambling with taxes there to slap you in the face on top of it. Think long term and keep it real!
Investing is a long term game, don't worry about the short term. As long as you invest in strong blue chip companies that you have conviction in, they will recover in the long term. DCA if you can.
Great presentation, Rob. My bond portion is in VUSB, Vanguard Ultra Short bond, and VTIP Vanguard TIPS. Bonds, CD & savings will never match inflation. But what money there is, will always be there. I use equity funds for portfolio growth. It is all considered ONE portfolio. At 72, I'm happy with a 70/30 portfolio. This can work as long as thee is no freaking out when equity prices decline. A low spending rate is also helpful. My asset allocation guard rail is a 75/25 portfolio. I will let it rise during good markets so I won't end up with excessive selling. I can manage most years just by not reinvesting the distributions.
Thank you Rob! Excellent content usual. Question about bullet share, are you guaranteed your principal and the yield to maturity if you hold until the fund is dissolved? Effectively making it the same as buying individual bonds and holding to maturity?
I'm all in equity funds. Tried a bond fund - it lost 15%. Put me off bonds completely. Hence why im watching this video! tbh, I was hoping to see some alternatives which have low correlation to equities.
Try iShares iBonds. Avoids interest rate risk. The 2024 investment grade fund has a yield to maturity of 3.00%. The hi-yield is 5.63%. Higher yields for longer term funds, of course. The can easily be laddered.
This is the video we’ve all been waiting for. Bonds are the worst investment ever in this generation because they only makes sense when interest rates are extremely high and begin dropping
TIPS are part of my bond allocation Rob, well done and to the point. Very educational. Great show to save and share. Thank you for what you do. Go Bucks!
I just bought a 3 yr CD at Vanguard. 2.55% coupon. 3 year treasury note auction coming up in the next week. Should yield above 2.5% and no state income tax.
6:42 Rob, I am watching this video as BIL now shows sec yield of 3.72! 12 month yield is .77. Does this indicate that if I buy this bond fund now that I can expect to get 3.72 pct return?
ROB - would be interested to see what you think of a fund like PIRMX. It would not be a forever holding. Its a blended fund and I used it to replace some of my total bond fund temporarily.
For the bulletshares, now that we are in 2024, is there data confirming that investors who bought bulletshares maturing in 2023, 2022, or earlier if they existed, got their principal back in full?
Rob, I love your videos. It's like going to college and studying investing. Thanks so much for all the great info and for being so knowledegable and such an easy host to listen to. Now, I have to go, because I have a ton of Berger videos to get through. Cheers!
I invest in Fidelity Total Bond Fund (FXNAX). I know the return is presently negative . I'm a contrarian and use dollar cost averaging to build up my portfolio. I hope by 2025 bonds will making a profit. All the analyst on CNBC talk of interest rate hikes for 2022 thru 2024.
I avoid any and every investment that is directly tied to interest rates and the government's measure of inflation. Both methodologies used by the government have been dishonest for a long time. Stocks or covered calls for me. Annuities are subject to the whims of an insurance company's investment management policies. 2008 and AIG proved that.
I apologize if you’ve already answered this…what about if one has a pension and chooses annuity payments over taking the lump sum? Can that serve as the bond portion of the portfolio, given its substantial enough and from a reputable institution that has been in business for over 120 years? What I’m thinking is pension, cash, equities. No bonds.
Great question. Similar to questions I've received about how to treat social security payments in one's investment plan, which I discussed in this video: th-cam.com/video/NhmbwgxmK14/w-d-xo.html
I don’t invest in bonds. If they were to offer a rate that covers for inflation I would reconsider for a little portion of my portfolio. Equities and cash right now.
Not a fan. Fees are often high, volatility can be significantly more than with a bond fund, and these types of ETFs underperform the benchmark index they use for their options strategy. If I'm going to take the risk, I'd just own the index.
When Morning star shows the percentage down YTD does that include what the fund pays? Or is it saying that the NAV is down 5.85 percent? Like the case of the BND ETF? Meaning you're getting an interest payment so if it says it's down 5.85 percent YTD did that include any interest payments? Thanks
"If you pass away in a couple of years the money is gone forever." This is only true for a life annuity. An annuity for a term of years (e.g., 20 years) will continue paying if you die before the end of the term.
Good point. There are many different types of annuities. Keep in mind, though, that annuities with any type of guarantee cost more. There is no free lunch.
QYLD/RYLD/XYLD are incredibly better than old school complex insurance products known as annuities . GlobalX etfs may not be the best investments but at least you’ll be left with a chunk of principal in the end and healthy payments along the way.
@@rob_berger DIA and SPIA annuities are as plain Jane as you get with no annual fees, hidden charges mgmt charges, expenses and extra fluff. It's as simple as it gets.
The ultimate alternative to bond funds is a laddered bond portfolio. Keep the bonds to laddered maturity and much lower risk than funds. You’ve got to stop ignoring this category
@@SKITTLELA Not even close to the same. There’s no “ maturity “ date with bond funds. You are guaranteed return of capital of the bonds face value with a ladder. You know what you are getting based on purchase at discount or a premium. Do some research
@@SKITTLELA Wrong again. Most active and many passive bond managers sell prior to maturity. Also intermediate can mean 5 years or 12 years. Managers can essentially liquidate and go longer with rising rates.
What about a MYGA (Multi Year Guaranteed Annuity) as a bond alternative? It's my understanding that it acts like a CD in that it matures in a certain number of years and you can build a MYGA ladder, but it pays slightly more than a CD. Maybe you could add MYGAs to your (long) list of future video topics 🙂 I'd especially like to learn more about pros/cons of MYGAs inside an IRA. BTW, I love your videos and I'm learning a lot!
As a new investor it's always great to hear from a person who has gone through all the difficult times and come ahead of it. It's unnerving to see your portfolio go from green to red but as mentioned if you have invested in quality names just have to keep adding to them and stay the course.
Don't sell off for the sake of selling to try to time the bottom... that's gambling with taxes there to slap you in the face on top of it. Think long term and keep it real!
Investing is a long term game, don't worry about the short term. As long as you invest in strong blue chip companies that you have conviction in, they will recover in the long term. DCA if you can.
SUPER informative. I discovered you rather recently Mr. Berger so I'm going back thru your catalog :)
Great presentation, Rob. My bond portion is in VUSB, Vanguard Ultra Short bond, and VTIP Vanguard TIPS. Bonds, CD & savings will never match inflation. But what money there is, will always be there. I use equity funds for portfolio growth. It is all considered ONE portfolio. At 72, I'm happy with a 70/30 portfolio. This can work as long as thee is no freaking out when equity prices decline. A low spending rate is also helpful. My asset allocation guard rail is a 75/25 portfolio. I will let it rise during good markets so I won't end up with excessive selling. I can manage most years just by not reinvesting the distributions.
I learned a lot from this. Yes, I'm catching up my education on Bonds.
Really appreciate the "Google results" discussion on bond alternatives. Another reason this is such a helpful channel. 👍🏼
Thank you Rob! Excellent content usual. Question about bullet share, are you guaranteed your principal and the yield to maturity if you hold until the fund is dissolved? Effectively making it the same as buying individual bonds and holding to maturity?
Repaying debt, especially high interest debt....what a great idea 💡. Fortunately I already did that. I have invested in schp and am considering vtip .
Good video. Floating rate ETFs are also worth a mention, especially in a rising rate environment.
I purchase a STIPS fund in February of 2021. It has done very well considering everything going on in the markets.
Great way to start my Sunday, thanks Rob
I'm all in equity funds. Tried a bond fund - it lost 15%. Put me off bonds completely. Hence why im watching this video!
tbh, I was hoping to see some alternatives which have low correlation to equities.
Bonds are lousy right now. I'll just stick with Money Market Funds for the time being.
Try iShares iBonds. Avoids interest rate risk. The 2024 investment grade fund has a yield to maturity of 3.00%. The hi-yield is 5.63%. Higher yields for longer term funds, of course. The can easily be laddered.
Also, preferred stock etfs were down 30% on average in 2008. You might as well have high yield bonds.
This is the video we’ve all been waiting for. Bonds are the worst investment ever in this generation because they only makes sense when interest rates are extremely high and begin dropping
You are only looking a bond mutual funds. There are other ways to invest in bonds without taking interest rate risk.
@@howardfriedman7077 iBonds are the only ones I will buy at this time. Too bad we can’t buy more than 10k a year
Great information! Thanks for fixing your mic issue with the banging! Thank you.
Another great video. Thanks. Just curious, have you looked at NUSI ?
Hi Rob, enjoy the videos. I would love to hear your thoughts on whether commodities and gold ETFs are a good bond alternative?
Great stuff. Thanks for all your videos!
TIPS are part of my bond allocation
Rob, well done and to the point. Very educational. Great show to save and share.
Thank you for what you do. Go Bucks!
I just bought a 3 yr CD at Vanguard. 2.55% coupon. 3 year treasury note auction coming up in the next week. Should yield above 2.5% and no state income tax.
Pretty detailed. I appreciate it
6:42 Rob, I am watching this video as BIL now shows sec yield of 3.72! 12 month yield is .77. Does this indicate that if I buy this bond fund now that I can expect to get 3.72 pct return?
ROB - would be interested to see what you think of a fund like PIRMX. It would not be a forever holding. Its a blended fund and I used it to replace some of my total bond fund temporarily.
For the bulletshares, now that we are in 2024, is there data confirming that investors who bought bulletshares maturing in 2023, 2022, or earlier if they existed, got their principal back in full?
Rob, I love your videos. It's like going to college and studying investing. Thanks so much for all the great info and for being so knowledegable and such an easy host to listen to. Now, I have to go, because I have a ton of Berger videos to get through. Cheers!
Government i bonds currently paying over 7%. Folks may want to look at those
Do the Invesco BulletShares ETFs return the entire principle if held to maturity?
I invest in Fidelity Total Bond Fund (FXNAX). I know the return is presently negative . I'm a contrarian and use dollar cost averaging to build up my portfolio. I hope by 2025 bonds will making a profit. All the analyst on CNBC talk of interest rate hikes for 2022 thru 2024.
I dont understand bond investing. Why would anyone hold bonds when the fed is hiking rates 6 times this year to fight inflation.
One could ask the same thing about stocks or any other asset.
I avoid any and every investment that is directly tied to interest rates and the government's measure of inflation. Both methodologies used by the government have been dishonest for a long time. Stocks or covered calls for me. Annuities are subject to the whims of an insurance company's investment management policies. 2008 and AIG proved that.
I recognized Wesley So immediately and then I remembered you're into chess too.
I apologize if you’ve already answered this…what about if one has a pension and chooses annuity payments over taking the lump sum? Can that serve as the bond portion of the portfolio, given its substantial enough and from a reputable institution that has been in business for over 120 years? What I’m thinking is pension, cash, equities. No bonds.
Great question. Similar to questions I've received about how to treat social security payments in one's investment plan, which I discussed in this video: th-cam.com/video/NhmbwgxmK14/w-d-xo.html
I'm doing this exact thing. At some point the market will implode and it will be nice to have the guaranteed annuity
Have you thought about including a Whole Life policy as a fixed income alternative?
Thank you
Good job rob
Here is a great bond alternative: McDonalds MCD Div.Yld: 2.25% Beta 0.61 low volatility
I don’t invest in bonds. If they were to offer a rate that covers for inflation I would reconsider for a little portion of my portfolio. Equities and cash right now.
Rob covered it: I-Bonds and TIPS.
Great video, as always. What are you thoughts about collared etfs like xrmi, qrmi and nusi as bond alternatives? Thanks
Not a fan. Fees are often high, volatility can be significantly more than with a bond fund, and these types of ETFs underperform the benchmark index they use for their options strategy. If I'm going to take the risk, I'd just own the index.
When Morning star shows the percentage down YTD does that include what the fund pays? Or is it saying that the NAV is down 5.85 percent? Like the case of the BND ETF? Meaning you're getting an interest payment so if it says it's down 5.85 percent YTD did that include any interest payments? Thanks
2 year+ Treasuries have already priced in hikes.
"If you pass away in a couple of years the money is gone forever." This is only true for a life annuity. An annuity for a term of years (e.g., 20 years) will continue paying if you die before the end of the term.
Good point. There are many different types of annuities. Keep in mind, though, that annuities with any type of guarantee cost more. There is no free lunch.
QYLD/RYLD/XYLD are incredibly better than old school complex insurance products known as annuities . GlobalX etfs may not be the best investments but at least you’ll be left with a chunk of principal in the end and healthy payments along the way.
@@rob_berger DIA and SPIA annuities are as plain Jane as you get with no annual fees, hidden charges mgmt charges, expenses and extra fluff. It's as simple as it gets.
Current is offering 4.0 up to 2000
Is the T-Bill ETF or something similar where Warren Buffet keeps his cash?
I believe he keeps cash in t-bills. Not sure if it would be via an ETF.
👏🏻👏🏻👏🏻👏🏻👌🏼 excellent
The ultimate alternative to bond funds is a laddered bond portfolio. Keep the bonds to laddered maturity and much lower risk than funds. You’ve got to stop ignoring this category
@@SKITTLELA Not even close to the same. There’s no “ maturity “ date with bond funds. You are guaranteed return of capital of the bonds face value with a ladder. You know what you are getting based on purchase at discount or a premium. Do some research
@@SKITTLELA Wrong again. Most active and many passive bond managers sell prior to maturity. Also intermediate can mean 5 years or 12 years. Managers can essentially liquidate and go longer with rising rates.
I’m not saying ladders are the clear winners, often it makes sense to trade out of a bond early, active often wins
@@SKITTLELA VWIUX or VTEB? Or MUB?
@@SKITTLELA 👍
Hey, I see you are a chess player! 😃
Yes I am!