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Really helpful video that explains what’s actually going on instead of the ridiculous videos of Financial Armageddon and global meltdown.

@NedFlanders39

Жыл бұрын

100%. So grateful for this guy.. think we all are!

@tastypymp1287

Жыл бұрын

What's ridiculous about them?

Thanks Ramin for another great video. What would you recommend as a suitable US Treasury Fund for your example of a Split Portfolio, from say the Vanguard Range of Funds?

this video is quite rich in knowledge and got me researching a lot about Bonds and currency-hedged ETFs

Big ups to everyone working effortlessly trying to make a living while building wealth. I wasn't financial free until my 40’s and I’m still in my 40’s, bought my second house already, earn on a monthly basis via my investment and got 5 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made. Great video! Thanks for sharing! Very inspiring! I love this.

Great video! Thanks Ramin. I'm considering investing in Bonds for the first time myself.

@Pensioncraft

Жыл бұрын

Glad it was helpful! @Ganok

Still watching Frank G Melbourne Australia 🇦🇺 ❤️

How did bonds perform in 1920s through to beginning of 1980 We have been in a 40 year interest rate decline so seems a bias to me

@christianlesayec1301

Жыл бұрын

Absolutely correct! This point being well explained in Rob Berger's video about investing 100% in bonds (he doesn't recommend that and reach the same conclusion as Ramin for the 60/40 solution). Check it out. I only follow a few people when it comes to my personal finance, and Ramin and Rob complement each other well.

Does Vanguard have a US Treasury Fund in their Portfolio

I dare not doubt the overall premise here, but the success of US equity over the last century was less 'in spite of two world wars' and instead 'partly thanks to two world wars'. By delaying entry twice, the US economy profited greatly from both world wars (and ensuing world peace) as well as receiving important technology transfers from European countries such as Britain and later, Germany. These long lasting benefits accrued from lend-lease and transatlantic academic brain drain etc. might well be outlying one-offs and circumstantial, i.e. less sustainable in this century. How beneficial these factors were/are will remain impossible to quantify.

Only loose money when you sell people. Unfortunately a lot of people think that there is much further to go down. Not sure I agree with this though.

@tastypymp1287

Жыл бұрын

Why?

I'm 35 and planning on starting an ultra-violence portfolio. I will start increasing my bond allocation after I turn 40. I only use VT and BNDW. Do you think I should go for the nightmare instead? My only fear is the possibility of a "second great depression" 😵

Great explanation thx.😃👍🏽

@Pensioncraft

Жыл бұрын

My pleasure @dmenace2003

Puts hedge stocks, when their IV is low... you buy those puppies. Like the other day VIX 22 to 20... layer in to some SPY puts and today they printed... and stay away same week expiration... go out at least 90 days to really 120 to 180 days on options. And you're good to go on hedging yourself. Bonds... well brokered CD's holding to maturity is a nice way to play "don't fight the Fed" on the tightening side on money on the sidelines.

Surely it's a good time to buy Govt bonds with the prices so depressed?

So will bond index funds recover their losses in the near future

@tastypymp1287

Жыл бұрын

Yes! But also, no.

So... cash is the best inflation hedge?

@MrSupernova111

Жыл бұрын

lol

Brilliantly explained and brilliantly reassuring as always. Thanks so much.

@Pensioncraft

Жыл бұрын

Glad you enjoyed it @JohninRosc

didn't know you were a gamer, or at least a former gamer 😊

🙏

I love the comparisons to DOOM levels, It feels exactly like nightmare level of game when investing aggressively :D Thank you for the great videos.

@Pensioncraft

Жыл бұрын

Glad you enjoyed!

This whole bond fiasco has me thinking that I might just focus on dividends and distributions for draw down strategy and just forgo capital appreciation/preservation, despite the studies that counter that.

@MrSupernova111

Жыл бұрын

That only works if you have enough money in your retirement account to live off dividends without selling securities. In that case you're rich enough to diversify in other ways and putting most of your savings in equities is probably not the best investment.

That's a reassuring analysis Ramen. Many thanks.

@Pensioncraft

Жыл бұрын

Glad it was helpful @Matthew Sexton

Are you not restricting yourself entirely to US - geographical? Understand there’s a multi national element to the S&P but, is the Vanguard fund not more geographically spread???

Thanks for the video!

@Pensioncraft

Жыл бұрын

You're welcome @Kvikende

I have a one fund portfolio

@tastypymp1287

Жыл бұрын

Oxymoron.

One US mutual fund VBIAX is as simple as it gets. It's boring and severally overlooked do to its boring nature and lack of any foreign holdings.

It’s not dead; it’s just resting.

@8G00SE8

Жыл бұрын

If this is a once a generation event, it's just been reborn.

@tastypymp1287

Жыл бұрын

ELLO POLLY!!!!! Testing! Testing! Testing! Testing! This is your nine o'clock alarm call!

As recent sharp interest rate increase it become more efficient just to buy latest debt. So any bonds go down if interest rates go up. Eventually the general etf bonds will acquire new debt with higher interest rate. Same way for stocks in general, but more, as the debts has more guarantees than stocks. Basically could be is better for you just go and put your money in a deposit or latest bonds. The key risk is you need money and need to sale as a discount, in the other hand you could buy as a discount.

Great video Ramin 👍🏻 I agree that 2022 has been a really strange year for the markets and should not be used in isolation to guide you. I have a 40% equity / 60% bond LS fund as a partial hedge against my individual stock holdings and ETF's. I am building my position up a bit since the low of last month as bonds will improve much further as we move through 2023. That said I will get out of the LS fund eventually and manage my own bond choices as I don't want the amount of UK exposure Vanguard place.

Probability of less than once in a 100 years from the Vanguard dude! That’s ridiculous, was he using 100 years of data?

"What is the safest lifestrategy fund", according to Benjamin Graham and Jack Bogle it was 50/50, and you can adjust your allocation depending on how things go but never go below 25% or above 75% equity, advice Vanguard didn't follow for their mixed asset ranges.

I’ve been averse to holding bonds since quantitive easing . Just couldn’t see how governments could unwind their positions.

@tastypymp1287

Жыл бұрын

What positions?

Great info as usual.

@Pensioncraft

Жыл бұрын

Glad you enjoyed it @K Cov

What role does the demographic bulge of boomers retiring play? If you are living off your investments then you are probably going to be selling no matter what, so won't there be persistent selling pressure on both stocks and bonds for the next 20 years?

@mmabagain

Жыл бұрын

Boomers will be living off of dividends mostly and not selling their stocks.

So is now maybe a good time to start drip feeding in in a bond fund or life strategy 20 alongside my global stocks ?

@alexmason9397

Жыл бұрын

If your close to retirement yes otherwise if you've got another 10 years to go u should go all equity without leverage

Indeed, correct that inflation can break your negative correlation between stocks and bonds because people sell-out of bonds. What you have not discussed in the video is that a bull market for stocks can also cause bonds to sell-off.

@segura9

Жыл бұрын

Why would he need to discuss? The correlation between both implies that if stocks go up, bonds would likely go down.

@tastypymp1287

Жыл бұрын

Until they don't.

good video, but i think probably it is aggresive rate hikes by central bank that causes both bonds and equities to fall together.The rate hikes increase policy rate and market rate causing bonds to fall , rate hikes also reduce money supply & liquidity causing equity market to fall. In india the inflation has been above central bank's target of 6 pc for 3 years but centrak bank has not undertaken agressive rate hikes, so the result is fall in bond prices but small rise in equity markets over past one year. Thic is just my first hand assessement as more research is required to reach a conclusion.

@anindadatta164

Жыл бұрын

Hope you partially agree with me that inflation as such doesnot cuase both the markets to fall, but agressive rate hikes probably causes both to fall together@PensionCraft - 𝐓𝐞𝐥𝐞𝐠𝐫𝐚𝐦 (pensioncraft)

Started buying the aggregate bond etf on vanguard through November. Decent yield to maturity now 5% yield. Also bought v3gp corporate at 6% yields. Sold the high dividend etf to fund the purchases. Similar returns but with less vol.

@MrSupernova111

Жыл бұрын

Does Vanguard's bond ETF also pay a dividend yield?

@adamhopkinson7299

Жыл бұрын

@@MrSupernova111 yeah it's the distribution ones.

@MrSupernova111

Жыл бұрын

@@adamhopkinson7299 . Ok. I looked at their official site and didn't see any "distributions." I only saw a 30-day SEC yield but I'm not sure that is equivalent to a distribution. They should post a link to historical distributions so would-be buyers can better understand what they're getting into.

@adamhopkinson7299

Жыл бұрын

@@MrSupernova111 I'm uk based, they don't put YTM or duration on the page I had to send them a message to get the information from them. They should have this clear on the page. The website needs improvement not as good as ishares.

@MrSupernova111

Жыл бұрын

@@adamhopkinson7299 . For sure. Thanks for the replies! Cheers!

The safest two funds to be in is a growth fund and a value fund that pays high dividends. Bonds are coming off zero interest rates. They can only fall from that when interest rates rise to any degree.

I have started to use Infrastructure funds as a hedging strategy

Very good video. I've been trying to explain this to my friends and I was at a loss due to not having statistical visuals like you have here. Now I can simply send this video instead. Brilliant job.

@Pensioncraft

Жыл бұрын

Glad it was helpful @Onur

If you could find assets that had a "guaranteed" negative corelation you should only expect to recieve the risk-free rate of return because the assets would be bid up due to arbitrage.

@djayjp

Жыл бұрын

Well you can buy puts and that will certainly provide a guaranteed negative correlation, but you will pay for it more often than not.

@chrisf1600

Жыл бұрын

Exactly, we should only expect to be compensated for risks that can't be diversified away

Congratulations from Brazil! I love your videos. Our realities are so different, but I'm sure we have a lot to learn from each other. Two questions: what if the world becomes permanently more inflationary, for example, because of the "deglobalization" phenomenon? Would a more aggressive portfolio be better in this scenario or would a different hedge be better? Tks!

@ranjitinamdar

Жыл бұрын

My 2 cents although I would also love an answer from PensionCraft - I think esp. for developing countries with devaluing currencies, gold has been a better hedge for equities for long term - esp. during inflation. Try 10-20-30 years data with "70% Global + local Equity - 10% Short term bonds (if you can, better in USD) - 20% Gold"...may work better for Brazil also.....This year, USD (and to some extent bitcoin) stole the thunder from gold, so even that worked so so.....PensionCraft, inputs please?

I wish this knowledge came before recent bond crash. All financial channels including ths one were pumping the myth of bonds being good hedge when shares are falling. But forgetting to add that this hedge does not work in high inflation environments. It was a classic recency bias because bonds were good hedge for equity fall for some time, so everybody thought it will continue to be like this in the future.

@alexmason9397

Жыл бұрын

It's not due to high inflation but because of rising interest rates. Generally bonds are a good hedge so there's no point in trying to predict high inflation periods

@tastypymp1287

Жыл бұрын

@Alex Mason Are you trying to gaslight them? Why are interest rates increasing Alex?

Not sure about energy in inflation reading due to the massive use of strategic oil reserves in usa and mild winter so far. Lets see in 3 months if it still holds

@tastypymp1287

Жыл бұрын

What mild winter?!

12:00 For anyone wondering why bonds fell this year so much relative to the amount of inflation, the answer is because the Fed had bought tons of bonds (artificially boosting their value) and then let them roll off their balance sheet as they expired. This is the dark side of QE when paired with excessive inflation.

@alexmason9397

Жыл бұрын

Its more to do with supply side inflation such as oil prices that QE

@tastypymp1287

Жыл бұрын

@Alex Mason Nah. It's QE. Increased money supply ALWAYS leads to inflation, that's an iron law of economics. If not in CPI, than assets instead. But inflation comes none the less.

@djayjp

Жыл бұрын

@@tastypymp1287 Not true if there's a decrease in economic activity which would've also increased the money supply. They could've had no inflation with QE (and no war). Think about it: there would've been severe deflation during the lockdowns as demand evaporated.

@tastypymp1287

Жыл бұрын

@@djayjp No. It ALWAYS leads to inflation, somewhere. Always, without fail. It's an axiom of economics 101.

So... I’m 100% in equites at the moment and have a lump sum (£75k) which I’d like to buy a global government bond fun with. From this, I’m thinking because bonds have fallen so much, this is a very good time to buy them?

@alexmason9397

Жыл бұрын

Trying to market time bonds is a bad idea because they are already priced based on expected interest rates. With equities so cheap at the moment, it's better to stay in equities, otherwise you'll be selling low and buying high

@fredatlas4396

Жыл бұрын

Where has my comment gone, who's removed it

@VoiceOfThe

Жыл бұрын

@@alexmason9397 Trouble is, I need some ‘protection’ at least. Being 100% in equities is too risky. Bond prices at the moment look to be at near 5 year lows. Surely now is a good time to buy them.

@alexmason9397

Жыл бұрын

@@VoiceOfThe I'm talking about bonds as a safer investment for short term investments. You're talking about market timing and trying to beat the market. Whatever crazy thing that u think is gonna happen to bond prices is already priced in so u shouldn't be buying based on economic conditions. Instead, u should just buy based on ur time horizon, where u invest in equities if u have 10+ years and bonds if u have less time

I draw the opposite conclusions from this. I don't explicitly care about the sharpe ratio for my portfolio. I care about the return and maximum drawdown (RoMaD). So I only care about hedges that work in the worst of times.

@tastypymp1287

Жыл бұрын

Don't care.

TWO FUND PORTFOLIO NEVER DIES Equity is a source of risk, and thus a source of return. Fixed income is a source of risk, and thus a source of return. SOME people will always want to maximize their investment landscape.

These projections are always this way, they predict a peak is near and then it supposedly comes back to normal. Its been projected that way for over a year now :)

@tastypymp1287

Жыл бұрын

Yep. And often the model is wrong because it can't account for every variable and unknown.

Let's talk about how HM Treasury authorised a £100bn extension to the BoE APF on 28 September and how that QE has been used as a short squeeze on the DAX40 and other indices?

Thanks Ramin, another excellent video which has put my mind at rest on the 60/40 strategy that I am in the process of implementing, having just retired. For anyone interested I constructed a very low cost 60/40 globally diversified portfolio, weighted by market cap using the following 3 Vanguard funds - this has an average Total Expense Ratio of only 0.12%: 53% VHVG Vanguard FTSE Developed World UCITS ETF Acc 7% VFEG Vanguard FTSE Emerging Markets UCITS ETF Acc 40% VAGS Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulating

how bout other "standard" safe portfolios like the Dalio all-weather portfolio,? how are those doing in the current environment?

On the upside, now is probably a great time to buy Treasuries.

@alexmason9397

Жыл бұрын

Not really because once interest rates fall again, equities and bonds will both go up

@djayjp

Жыл бұрын

@@alexmason9397 Bonds will have a much higher risk adjusted return. I recommend selecting the highest Sharpe or Sortino ratio portfolio, then apply significant leverage.

It's only a loss if you panic and actually sell. If you buy bonds and hold them to maturity, there is nothing to worry about.

@bencarter7839

Жыл бұрын

Except inflation

@apga1998

Жыл бұрын

@@bencarter7839 always! "Laddering" your bond holdings is one way to tackle the problem of inflation. Others use a "barbell" approach. Thank you for your reply. Good luck!

@bencarter7839

Жыл бұрын

@@apga1998 Yes, I am aware of this, but it depends on where rates head in comparison with inflation. The fed may not be able to raise rates high enough this time due to the US government's debt load. A large percentage of government debt rolls over in the next 2-3 years.

@MrSupernova111

Жыл бұрын

Should retirees stop paying rent and go hungry while they wait for the market rebound or maturity date? lol

@8G00SE8

Жыл бұрын

@@bencarter7839 The bond point of having a multi asset portfolio of cash, bonds, stocks and property is that you get something in all environments, inflation is bad for cash and bonds, but that income is better than the massive loses they are suffering elsewhere in the portfolio.

Bonds are for people who panic.

@thomasmeredith9124

Жыл бұрын

Yes I also think that way.

@tastypymp1287

Жыл бұрын

@@thomasmeredith9124 Beep.

"if you're looking for a strategy which never loses money in any environment, you'll never find one"

@alexmason9397

Жыл бұрын

Shut up

I keep on getting $78,000 every week from a new trading platforms in town which Elon recommends

@jamewilliams7660

Жыл бұрын

Her good reputation already speaks for her last month i invested over $100,000 with her and I've already made over $250,000 profit.

@kylepeter3370

Жыл бұрын

How can I make a successful investment in stocks and profitable trades?? I’m thinking of Mrs Cathie wood 😏 and suggestions🤷

@mellowmarkable

Жыл бұрын

Scam spam scam

@davidthompson9926

Жыл бұрын

She’s an awesome person I’ve made $125,000 trading with her I’m blessed to meet her

@drantoniojohn8168

Жыл бұрын

How can I get in touch with her I’m in need of her assistance

Never Bonds. Never Crypto. Never EM.

@djayjp

Жыл бұрын

Someone wasn't paying attention lol.

@dennykeaton9701

Жыл бұрын

Ouch

This whole bond fiasco has me thinking that I might just focus on dividends and distributions for draw down strategy and just forgo capital appreciation/preservation, despite the studies that counter that.

@alexmason9397

Жыл бұрын

There is literally no reason for dividend stocks

@francesconesta6058

Жыл бұрын

I learned my lesson that dividend stocks are not tax efficient in a taxable account. Diversify and probably look for large value stock ETFs with not a so high dividend yield. That seems to help reducing drawdown in an unstable market but still mid/long term bonds are the ones with negative correlation with stocks. Ramin made a good point, 2022 was crap but cannot be used as the new normal. Still in the near term I'm not sure when the pain is going to be over, FED will not u turn on rates any time soon.

@tastypymp1287

Жыл бұрын

@@annacomnena217 How are they a constant?

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