I think this explains much of his performance.
Interesting that the only one calling for a bull run in bonds 4 months ago was Rob Prechter.
It looks like Japan all over again were their 10 year has been stuck at 1.5% for the past 10 years. Gee Ben Bernanke, it worked so great for them why not bring it to the USA. Senior citizens living off of principle and having to buy junk bonds to get greater than 5% yield.
I first bought into PTTRX three or so years ago @10.84. I watched it fall to 9.91 and then rise into the mid 11'2 which were an all time record high. Along the way I bought more. I posted on here when I sold @11.04. Problem I found is that for a year or so the money that I took out of PTTRX lost money. It wasn't suppose to but between buying GE @20 and selling @17, buying a half dozen other things (stocks, mutual funds, etc.) I didn't do very well. I became frustrated and bought back into PTTRX. At about the same price that I sold. Now it's 24 cents less. In several weeks.
It dropped 10% before; I know that it's going to drop 10% this time. That's why I sold before: the NAV was too high and it still is, even @ 10.80.
But there's nowhere else to go. Perhaps most frustratingly is that I'm almost 65 and PTTRX is only paying 2.9%. A whole class of us-twenty million or so-are getting screwed so people can buy homes and run up their credit card debts. Meanwhile we suffer. And the homes we buy won't go anywhere because we can't afford to pay more for them.
Someday soon somebody is going to realize that interest rates need to go up. Until then housing values-especially in areas with a lot of Baby Boomers-are not going up one penny!
In the meantime I have no confidence in myself and my ability to invest; I have, if possible, less confidence in anyone that I see on CNBC. Do I believe in PTTRX? I use to. But today I'm not so sure that I believe in anything, certainly my faith is less @ less than 3%. As is my margin for error.
But there aren't many alternatives.
So, here I sit. I'll follow PTTRX down-and yes, it will continue to go down, as it has for over 25 years. My only hope is that for the same 25 years somewhere down the road it will rise back to 11.00 and then, if I need, I will sell. In the meantime I suppose that I will be happy to receive my 3% interest. It's better than the 1 and 1/2% that most CDS will pay me. And, even then, I'm not so sure that I really trust the FDIC as much as I used to.
I also have VBMFX in my 401k. Hopefully you have another bond choice. Bill made a bet that was premature, I think he's right that we are nearing the end of this long term bond bull. Seriously, 3.5% for a 30 year treasury, is the world f$%@ckn mad?
But as you said, what else is there?
I am looking at money market, the trouble with bubbles is you can never know when they burst until after it pops. Take a look at silver that is the fate of all of us in bonds one day. So I am looking to reverse dollar cost average out of bonds.
Again, I'm not touching stocks until I see handcuffs. I don't trust the price until I see this chart is back to 'normal' levels.
Thats the crap we know about, just 3 trillion in mark to zero assets. Wanna bet there more off books bull crap that we don't know about?
Until that happens the stock market discounts nothing but uncle Ben's casino.
I have owned this for 10 years in my 401k along with VBMFX. I have begun to unwind a few weeks ago and now am mostly in VBMFX. I left the stock market in 2006 with the exception of gold and never looked back, I have no intention of EVEr going back until I see Ben Bernanke and company being hauled away in shackles.
I am starting to look at dumping everything into money market since I see no yield in bonds. If there is no yield (less then 4%) why should I take on market risk? Whats the point?