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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (35963)	11/16/2009 7:09:23 PM
From: E_K_S	Respond to of 78666

RE: ETF Bond Funds Now I remember, Saturday on the Bob Brinker show a caller discussed the ETF "MBB" and asked if it was a good tracking ETF for the Vanguard GNMA Fund (VFIIX). The expense ratio is quite low at 0.25% and the yield is a bit higher than the VFIIX fund. finance.yahoo.com I still think on any interest rate hike, both of these funds (VFIIX or MBB) NAV will fall, perhaps as much as 15%. With the ETF you can trade out during the day and have no limitations on buying back like you do with the 30-day rule at Vanguard. The key will be if you have the discipline to exit the position on the first sign of a Fed rate increase. The VFIIX hit an all time high today at $10.86/share and according to Brinker the possible downside is $9.00/share or a 17% drop in NAV. Most of my shares were bought in the $9.50/share - $10.00/share range. Maybe the call is to use ETF's so you can exit fast but include JXI to the mix to protect against a falling dollar. I am not too clear as to what the best approach is but this interest rate cut (stimulus) was unprecedented so the unwinding of it should be as well. EKS

To: Paul Senior who wrote (35963)	11/17/2009 2:32:10 PM
From: Cogito Ergo Sum	Respond to of 78666

A bit of macro speak but I've been thinking about rising rates also.. Many assume that your fed will wait too long to curtail inflation.. FWIW.. The low USD (not a USD crash) is good for getting the US out of its jam by assisting the manufacturing and exported service sectors.. Inflation does not a seem to be an issue yet.. but rates will rise if it appears and I think there is a good chance the fed may act earlier than many think... or if the USD looks like it will crash.. (I suspect that the fed has a 'target range' but ya I'm just guessing).. All my stuff is geared to low rates it seems.. between my high proportion of infrastructure and yield plays and my metal stocks for torque... I'm wondering what I'll do as rates rise... It's really dangerous when a swan's head spins... like a rock on a string LOL TBS