Bond ETFs for income

Discussion in 'ETFs' started by Muffhands, Apr 16, 2018.

  1. This is obviously the first thing I did. Way before asking a question on this " internet forum".... As the price of the ETF falls the yields tend to spike.... I love how you downplay the integrity of the very forum you participate in like its some worthless "internet forum". Very funny.
    #41     May 17, 2018
  2. Sig


    Much of the advice on this forum is indeed worse than worthless, is just plain wrong. Look no further than this thread. There can be nuggets of good info among the crap, it's not inconsistent to point that out.
    #42     May 17, 2018
  3. I think you just have to filter out the bs but there’s a lot of smart members on this forum. Agree to disagree
    #43     May 17, 2018
  4. Anyways I went with JNK and VCSH for income plays.

    Also looking at the charts of these ETFs is essentially worthless because about 90% of the income comes from reinvesting dividends when etf prices fall and yield increases. Hence why these ETFs have a positive expectancy after 10 years even though their “price performance” might be in the negative.
    #44     May 17, 2018
  5. sss12


    What ?...your second paragraph makes no sense at all.

    anyway, hope you want to be long energy. JNK buys largest part by capitalization of the high yield universe, which is (and as long as I can remember) energy nothing wrong with that per se, just should be aware.

    With the short end of yield curve backing up, not sure where the benefit is in a short term corp (VCSH). Hell, if you want a cash alt you can get almost the same yield on a 6m CD. But each to his own. specific recommendation was post #15
    Last edited: May 17, 2018
    #45     May 17, 2018
  6. What I’m saying is if you look at the chart of a bond etf it doesn’t accurately represent the performance but cause it doesn’t take into account distributions......
    #46     May 17, 2018
  7. And if you reinvest distrubutions as the etf falls in price, your yield goes up and you end up buying more shares with a higher yield.
    #47     May 17, 2018
  8. sss12


    Just like any other chart.
    #48     May 17, 2018
  9. sss12


    Until the dividend is cut. If the price is falling, many times it is indicative of problems in the underlying securities. No free lunch.

    For any HY portfolio the risk is default where not only is cash flow lost but net asset value as well. That is why when you are playing in this market you need to be very aware of the managers outlook, ability in this area.

    As I mentioned, JNK is way overweight energy. It has been killing it, but what happens is WTI goes back to 40 ? I don't think JNK has any active management, that is why I said you better like energy. is not Exxon, and Chevron they own, it is high yield after all.
    Last edited: May 17, 2018
    #49     May 17, 2018
  10. Except for dividends are a small portion of stock appreciation/depreciation and for bonds it’s the opposite... so a chart of a stock is much more reflective of the performance while it’s not so much for bonds... actually completely different...

    I hate the saying “there’s no free lunch”. It’s the dumbest thing ever. You get paid for taking risk. That’s it. You make money for the risk you take. It has nothing to do woth getting anything for free.
    #50     May 17, 2018