Comments on: Fixed Income and my Asset Allocation http://www.thedividendguyblog.com/fixed-income-and-my-asset-allocation/ One Guy's Journey to Passive Income Through Dividend Investing Fri, 10 Feb 2012 13:02:29 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Bought Some More Fixed Income For My Portfolio | The Dividend Guy Blog http://www.thedividendguyblog.com/fixed-income-and-my-asset-allocation/comment-page-1/#comment-54729 Bought Some More Fixed Income For My Portfolio | The Dividend Guy Blog Wed, 17 Jun 2009 11:01:12 +0000 http://www.thedividendguyblog.com/?p=1725#comment-54729 [...] it took me from only 10% fixed income to a whopping 12.4% fixed income. As I wrote about a month ago, I had been focused on buying equities with the market down from October to January and the fixed [...] [...] it took me from only 10% fixed income to a whopping 12.4% fixed income. As I wrote about a month ago, I had been focused on buying equities with the market down from October to January and the fixed [...]

]]> By: Patrick http://www.thedividendguyblog.com/fixed-income-and-my-asset-allocation/comment-page-1/#comment-54571 Patrick Tue, 28 Apr 2009 03:39:25 +0000 http://www.thedividendguyblog.com/?p=1725#comment-54571 Dumb question... Why does someone with a 25-year investment horizon want ANY fixed income assets? Why not go 100% stocks? (After keeping some cash equivalents for your short-term needs, of course.) Dumb question… Why does someone with a 25-year investment horizon want ANY fixed income assets? Why not go 100% stocks? (After keeping some cash equivalents for your short-term needs, of course.)

]]> By: Charles http://www.thedividendguyblog.com/fixed-income-and-my-asset-allocation/comment-page-1/#comment-54564 Charles Sun, 26 Apr 2009 12:32:11 +0000 http://www.thedividendguyblog.com/?p=1725#comment-54564 I support the idea on corporate bonds given they did too have been hammered and the spreads are really attractive. I mean if you are willing to purchased undervalued equities, the bonds behind the same companies can also be had for perhaps lesser potential return but even more security than the common. I mean if you are willing to purchase say Royal Bank common, what's not to say you can't buy Royal bank preferred's or bonds. In fact you could even go for bonds of companies you were barely considering their equity. Real return bonds are another option, they are technically cheap right now and if some are of the belief inflation is gonna be a huge issue (I personally don't, not at least for next couple years). I support the idea on corporate bonds given they did too have been hammered and the spreads are really attractive. I mean if you are willing to purchased undervalued equities, the bonds behind the same companies can also be had for perhaps lesser potential return but even more security than the common.

I mean if you are willing to purchase say Royal Bank common, what’s not to say you can’t buy Royal bank preferred’s or bonds. In fact you could even go for bonds of companies you were barely considering their equity. Real return bonds are another option, they are technically cheap right now and if some are of the belief inflation is gonna be a huge issue (I personally don’t, not at least for next couple years).

]]> By: Dividend Growth Investor http://www.thedividendguyblog.com/fixed-income-and-my-asset-allocation/comment-page-1/#comment-54549 Dividend Growth Investor Mon, 20 Apr 2009 20:45:59 +0000 http://www.thedividendguyblog.com/?p=1725#comment-54549 TDG, The problem is what type of fixed income security to buy. Longer Term CD's could get you 4% if you lock your money for 5-7 years. US Government bonds won't even get you 4%.. You could purchase corporate bonds or even high yield preferred stocks, but this could backfire.. DGI TDG,

The problem is what type of fixed income security to buy. Longer Term CD’s could get you 4% if you lock your money for 5-7 years. US Government bonds won’t even get you 4%.. You could purchase corporate bonds or even high yield preferred stocks, but this could backfire..

DGI

]]> By: John http://www.thedividendguyblog.com/fixed-income-and-my-asset-allocation/comment-page-1/#comment-54548 John Mon, 20 Apr 2009 13:49:12 +0000 http://www.thedividendguyblog.com/?p=1725#comment-54548 your post struck a responsive chord because I'm there too-- very little in fixed income, because of both low yields on bonds and very inexpensive (i hope) equity valuations. My core belief is that a portfolio of very high quality dividend paying stocks can double in the next 5 years off the present low level. I also believe that the massive government stimulus will produce higher interest rates. So five years from now I hope to be able to take that double and invest in in bonds at higher yields. The market timing aspect of this strategy bothers me too, but remember how your portfolio performed over the past 15 years. Rebalancing wouldn't have helped much in the equity market. I'm not trying to time every tick, but the risk/reward in the stock market following a 50% drop seems pretty attractive. And bond yields are at historic highs. Buffett called it a bond bubble. Even though spreads are wide, absolute yield levels aren't particularly attractive compared with where they've been over the past 40 years. your post struck a responsive chord because I’m there too– very little in fixed income, because of both low yields on bonds and very inexpensive (i hope) equity valuations.

My core belief is that a portfolio of very high quality dividend paying stocks can double in the next 5 years off the present low level. I also believe that the massive government stimulus will produce higher interest rates. So five years from now I hope to be able to take that double and invest in in bonds at higher yields.

The market timing aspect of this strategy bothers me too, but remember how your portfolio performed over the past 15 years. Rebalancing wouldn’t have helped much in the equity market. I’m not trying to time every tick, but the risk/reward in the stock market following a 50% drop seems pretty attractive.

And bond yields are at historic highs. Buffett called it a bond bubble. Even though spreads are wide, absolute yield levels aren’t particularly attractive compared with where they’ve been over the past 40 years.

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