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Should a "Growth" Investor Consider Bonds In the near future and why?

#1
I know some of us old timers recommend bonds as valid and preferred investment. Should an investor who cares about growing his nest egg count on bonds? I am not talking about the multimillionaire who is content and cares about maintenance earnings, I am talking about you when you were beginning with 200 shares of something....


My bond funds slowed my growth down when I invested as an employee. I listened to the same noise: Bonds are good investment. Is it? I like honest evaluations of why I should pursue bonds compared to good company stocks, common and/or preferred, with or w/o dividend?

I am not implying bonds are bad investment under any circumstance. I want to zero on the young investor and, in general, on the growth interested investor with reasonable risk.
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#2
Bonds are really only good for maintaining wealth. If you're young and need to grow wealth for retirement, stocks are the only way to get there. I was 100% stocks for over 30 years. I did take a big hit in 2001 and 2008, but I was still young enough to ride out those recessions. That said, I am near retirement and have achieved my retirement goals, so I am in the process of becoming more defensive.
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#3
(09-14-2018, 08:27 AM)ProudFoot Wrote: Bonds are really only good for maintaining wealth.  If you're young and need to grow wealth for retirement, stocks are the only way to get there.  I was 100% stocks for over 30 years.  I did take a big hit in 2001 and 2008, but I was still young enough to ride out those recessions.  That said, I am near retirement and have achieved my retirement goals, so I am in the process of becoming more defensive.


I am with you!
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#4
(11-20-2018, 09:36 AM)tophdna Wrote:
(09-14-2018, 08:27 AM)ProudFoot Wrote: Bonds are really only good for maintaining wealth.  If you're young and need to grow wealth for retirement, stocks are the only way to get there.  I was 100% stocks for over 30 years.  I did take a big hit in 2001 and 2008, but I was still young enough to ride out those recessions.  That said, I am near retirement and have achieved my retirement goals, so I am in the process of becoming more defensive.


I am with you!

I was 100% stocks for over 30 years.  I did take a big hit in 2001 and 2008, but I was still young enough to ride out those recessions.  That said, I am near retirement and have achieved my retirement goals, so I am in the process of becoming more defensive
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#5
(11-20-2018, 09:39 AM)ProudFoot Wrote:
(11-20-2018, 09:36 AM)tophdna Wrote:
(09-14-2018, 08:27 AM)ProudFoot Wrote: Bonds are really only good for maintaining wealth.  If you're young and need to grow wealth for retirement, stocks are the only way to get there.  I was 100% stocks for over 30 years.  I did take a big hit in 2001 and 2008, but I was still young enough to ride out those recessions.  That said, I am near retirement and have achieved my retirement goals, so I am in the process of becoming more defensive.


I am with you!

I was 100% stocks for over 30 years.  I did take a big hit in 2001 and 2008, but I was still young enough to ride out those recessions.  That said, I am near retirement and have achieved my retirement goals, so I am in the process of becoming more defensive

Good for you! We all took a hit at those times. If it makes you feel better about 2008, I was working at the time and 80% funds.
They dropped by 30% and I am talking about popular funds. I waited for awhile and sold all of them and invested in good stocks at their lows.
I more than tripled my investments in les than 5 years. Some of those funds were loaded with bonds and such....
My message to you: "There is life after work!"
Good luck!
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#6
My children and grandkids r in aggressive equity index funds with little or no bonds. My fixed income allocation (40%) is cash and <2yr CD's. I think with trillion dollar budget deficits,rising interest rates and flat yield curve bonds would be a tough sell for me. Good quality stocks or inexpensive equity index funds r better than bonds IMHO. buy a boat and drink cold beer. stay the course
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#7
Good for you LivingLife!

I am dropping down to six pack but I stay the course. Trying to keep myself steady. I am on course now. One of my sales needs repair from the storm....I am OK. I'll have another beer!
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#8
Without knowing your age or circumstances, why not look at some the bond closed end funds.  They use leverage to juice returns.  You can use them for awhile to bridge you into the next phrase of life.  Take a look some of them are hitting new 52 week high at the same time paying 8 3/4 dividends ( spread out monthly ).  Best kept secret on Wall Street.
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#9
Based on what I read, I don't believe this is a good investment for the current environment, specifically:

1. Rising interest rate are bad for bonds in general.
2. These investments do well with a steep yield curve, and we are not there - may get there but I suspect it will not have a major positive impact given the corresponding interest rate rise.
3. Being closed end, it is subject to sentiment more then an open end fund - and sentiment is currently negative for bonds.

I looked at "NUV" - its at near all time lows.
You stated "some are at all time highs" and paying 8 3/4 - please elaborate - most bond funds that are paying that kind of rate are now at all time lows (fund price) - for obvious reasons.
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#10
Take a look at the Pimco closed end funds. Both (PCI, and PDI ) have hit 52 week highs over the last week or so. Some of these funds are run by very smart people, I.e. prior Morning star fixed income managers of the year. Yes we are in a raising fixed rate market, but one they use different kind of interest rate swaps that shelter them from raising rates. Second 2 months ago the 10 yr. note was over 3 percent, now we are at 2.86, with at least one rate hike and we are under 3%. Remember the tariffs, they are helping to keep rates down. The flattening rate curve is flashing a warning sign. For the weak at heart this is not along term position. For me who has been in these funds for years will continue to be in them to collect the monthly dividend payments and hopefully they will get back to the old ways and pay a year end special payment. They have been the best secret on the market and yes they might take a hit just like any stock, but you are lucky to get a 4 % dividend, while these shelter you with 8 3/4.

Not all all investments are for everybody. But they are differently there for me. I’ve been hearing the higher rate war cry for years now. It has to happen, just like a recession has to happen sooner or later. I’ve been enjoying them for so long and collecting the dividend and year end special dividends that even if they go to zero I will still be a happy camper. If fang stocks are home runs I’ve been hitting a lot of triples
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