QVM Group

It's a Winter Warming Spell - But More Snow Ahead for Markets

basehitz:

Good point. Not sure how to quanitify that or if the overall effect of corporations moving offshore will be material, but it's a good point.

It's a Winter Warming Spell - But More Snow Ahead for Markets

Steve Pasq:

That is an easy "what if". If the index composition changes and the price move differently as a result, I would change my opinion accordingly. But so far neither has happened.

What Are You Being Paid for Your Bonds?

Prudy:

There are different types of bond yield, including "coupon", "current yield" (of which 30-day SEC yield is a standardized version for funds), "yield to maturity" and "distribution yield".

The coupon is merely the amount of money paid annually on the bond. The current yield is the coupon divided by price. The yield to maturity is the current yield, plus gains or losses as discounts or premiums vanish as the bond approaches maturity. The distribution yield is the trailing 12-month payments, which could include gains or even return of principal.

Yield-to-maturity is at a point in time. The SEC yield is a 30-day average.

You would probably find disagreement among advisors on which to use, however, I would probably use the yield to maturity, because it is more inclusive of value considerations that current yield, but I would not argue with anyone who thinks the SEC yield is a better measure.

Quoted rates on Treasuries assume the Treasury to be at par. The yield to maturity approach adjusts the yield back to a the equivalent of buying a bond at par. For that reason yield to maturity seems to make more sense to me.

What Are You Being Paid for Your Bonds?

Jade Queen:

CA, NY, FL and TX are the states with the most weight in most muni portfolios. CA is the heaviest and CA is in the worst shape.

You can avoid CA by purchasing single state funds that are not CA which would have a similar tax level compared to a national muni fund, depending on where you live.

The issue perhaps not so much what states are in the portfolio, as how much of a fund is local as opposed to state bonds, and how much is revenue bonds versus GO bonds, and how much of the revenue bonds are for essential services (such as water and sewer) versus services that may fail economically (such as hospitals or parking lots).

There are furhter break-downs within GO's, and big city local bonds may be safer than small town local bonds, but maybe not.

Our view is that state level GO's and perhaps some large city GO's would be in the "too big to fail" category that has been used to bail out insurance companies, banks, and soon car companies. The devastation of a default by CA, for example, might be worse than the failure of Citi or AIG.

Relative Performance of Asset Categories

thank you granger -- very kind of you

Major Asset Class 1, 3, 5, 10 & 15 Year Returns

AJ30

No I have not studied separate commodities in this way yet, but I will put that sub-category study into my list of future studies. Some will be easier than others to gather information. HIstory for majors like gold and oil is easy, but minors may not be so easy to find.

Thanks.

Richard