I figure when somebody uses the phrase "exactly the same volatility decay" and his name is "semantics" I don't have anything to say about that. let the reader act accordingly.
Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
- firebirdparts
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Re: Why not 100% PSLDX?
This time is the same
Re: Why not 100% PSLDX?
I don't mean to sound like a jerk, but I don't understand why you would buy a complex product like this without understanding how mutual funds in general work. I hope you own it in a tax advantaged account
Re: Why not 100% PSLDX?
I call blackmagictruckery on this one! This is the third consecutive quarter where PSLDX paid out a large dividend. Job well done, but I wonder what's their secret sauce?
Re: Why not 100% PSLDX?
I cannot purchase new shares either. JP Morgan advisor said it says available to purchase on his end so he's not sure why. He suggested bring over the shares in kind and then I should be able to buy more. He doesn't think there's any minimums if I already own shares.MA405 wrote: ↑Thu Jun 10, 2021 11:04 pmWouldn’t let me complete simulated order in my taxable, “This mutual fund is not available for purchase in your account”.mutedbytes wrote: ↑Thu Jun 10, 2021 4:43 pmInteresting. Any minimums? How is JP Morgan in general service-wise, interface etc?
Don’t have IRA accounts at Chase.
Chase/JP Morgan interface has been fine for my minimal trading. I believe I have the JP Morgan self directed account now. Their naming of the accounts has been through some iterations. There's no fees. With the private client upgrade I did get a dedicated advisor. I'm actually impressed how responsive he has been. He did pitch an SMA account at one point but I said I wasn't really interested and he didn't push further.
Re: Why not 100% PSLDX?
3 consecutive days of 20% drop...smh...have a nice dayNMBob wrote: ↑Fri Jun 11, 2021 7:46 amdaily rebalancing of upro/edv...smh..have a nice daySemantics wrote: ↑Thu Jun 10, 2021 7:53 pmIf you rebalance daily this cannot happen, your exposure to stocks will be 100% of the portfolio value every day, just like with the 100% SPY version.NMBob wrote: ↑Thu Jun 10, 2021 7:39 pmTechnically it can probably never go to zero, but etfs have closed or reduced leverage multipliers.Semantics wrote: ↑Thu Jun 10, 2021 11:56 amIf you're 33% UPRO then you have exactly the same volatility decay and risk of equity going to zero as if you were holding 100% SPY, assuming regular rebalancing.NMBob wrote: ↑Wed Jun 02, 2021 11:44 pm
if you believe in A) volatility decay being a possible risk that does exist that may or may not come to bite you or B) possibility of a 3x stock etf going to zero value....then taking those risks in upro just to get 100 percent stock seems like low reward, higher risk. At least in 55/45 hfea one has the high reward of 160 in stock return.
Only advantages of PSLDX that I see are that it's set it and forget it, and maybe there's some value to the more diversified bond portion (not just LTT).
Look at 3 consecutive days of 20 percent drop triggering sp500 shutdown. That means you have 51.2 percent of spy left of your beginning 3 day total, or only 6.4 percent of your upro. So your initial proposal of 33 percent upro is now 2.
BTW if you want to consider ridiculous scenarios, shouldn't you consider both extremes? 3 consecutive days of 20% gain = 73% increase for PSLDX, and with no rebalancing 103% increase for upro/edv. Consider that in the long run market generally goes up.
Last edited by Semantics on Fri Jun 11, 2021 12:34 pm, edited 3 times in total.
Re: Why not 100% PSLDX?
I'm not sure what your point is or what my screen name has to do with this. My point, since you don't seem to follow, is that volatility decay is simply a mathematical property of converting mean to geometric mean (look up the AM-GM inequality and Ito's Lemma). 1/3 of a 3x fund (rest cash) has exactly the same volatility of the 1x fund -- therefore the identical volatility decay. You would only suffer from greater volatility decay if you don't rebalance, and let your allocation to the 3x fund slip to below 1/3 of the portfolio value. I really don't understand what you're trying to argue here. I strongly recommend understanding the math before you even consider using leverage in a portfolio.firebirdparts wrote: ↑Fri Jun 11, 2021 10:48 amI figure when somebody uses the phrase "exactly the same volatility decay" and his name is "semantics" I don't have anything to say about that. let the reader act accordingly.
Re: Why not 100% PSLDX?
I failed to even notice in my earlier replies that this example is incomplete resulting in a seemingly backwards conclusion, in addition to being unrealistic. Let's look at the complete portfolio behavior assuming bond values don't change.NMBob wrote: ↑Thu Jun 10, 2021 7:39 pmTechnically it can probably never go to zero, but etfs have closed or reduced leverage multipliers.Semantics wrote: ↑Thu Jun 10, 2021 11:56 amIf you're 33% UPRO then you have exactly the same volatility decay and risk of equity going to zero as if you were holding 100% SPY, assuming regular rebalancing.NMBob wrote: ↑Wed Jun 02, 2021 11:44 pmif you believe in A) volatility decay being a possible risk that does exist that may or may not come to bite you or B) possibility of a 3x stock etf going to zero value....then taking those risks in upro just to get 100 percent stock seems like low reward, higher risk. At least in 55/45 hfea one has the high reward of 160 in stock return.RussellWilson wrote: ↑Sun Apr 11, 2021 10:59 pm Thinking of attempting a DYI with 33% UPRO and 67% EDV. I'm wondering, is increasing duration taking the same kind of risk as leverage? The duration for PSLDX is ~16, so if EDV was ~24, is that the same kind of interest rate risk and expected performance as levering a 16 duration treasury bond by 1.5x? I know PSLDX isn't all treasuries so the risk profile is different in that regard...
I know that UPRO behaves differently than 3x margin SP 500. But say I'm aiming for 100% SP 500 and 100% LTT, is the above a decent approximation? Considering the combined ER of EDV/UPRO is .36, vs 1.02 for PSLDX, it seems like a DYI version is optimal, unless maybe UPRO's issues stemming from daily leverage are worth paying a significant amount to avoid?
Only advantages of PSLDX that I see are that it's set it and forget it, and maybe there's some value to the more diversified bond portion (not just LTT).
Look at 3 consecutive days of 20 percent drop triggering sp500 shutdown. That means you have 51.2 percent of spy left of your beginning 3 day total, or only 6.4 percent of your upro. So your initial proposal of 33 percent upro is now 2. Now you hope the bonds save you enough you can recover.
33% UPRO / 67% EDV: becomes 2% UPRO / 67% EDV = remaining portfolio value is 69%
100% SPY (or for PSLDX case: 100% SPY / 100% bonds / -100% cash) = remaining portfolio value is 51.2%
Explain to me again how UPRO/EDV is a worse option? I still don't get it. The daily rebalancing of UPRO helps to limit your losses in a major crash.
Re: Why not 100% PSLDX?
I failed to even notice in my earlier replies that this example is incomplete resulting in a seemingly backwards conclusion, in addition to being unrealistic. Let's look at the complete portfolio behavior assuming bond values don't change.Semantics wrote: ↑Fri Jun 11, 2021 5:32 pm Technically it can probably never go to zero, but etfs have closed or reduced leverage multipliers.
Look at 3 consecutive days of 20 percent drop triggering sp500 shutdown. That means you have 51.2 percent of spy left of your beginning 3 day total, or only 6.4 percent of your upro. So your initial proposal of 33 percent upro is now 2. Now you hope the bonds save you enough you can recover.
33% UPRO / 67% EDV: becomes 2% UPRO / 67% EDV = remaining portfolio value is 69%
100% SPY (or for PSLDX case: 100% SPY / 100% bonds / -100% cash) = remaining portfolio value is 51.2%
Explain to me again how UPRO/EDV is a worse option? I still don't get it. The daily rebalancing of UPRO helps to limit your losses in a major crash.
[/quote]
You aren't rebalancing consistently.
UPRO/EDV case (lose 60 percent of UPRO every day, rebalance back to 33 / 67 every day)
Day 1 market: 0.33*0.4 + 0.67 => portfolio = 0.802
Day 1 rebalance: 0.802 * [1/3 2/3] => 0.267/0.535
Day 2 market: 0.267*0.4 + 0.535 => portfolio = 0.642
Day 2 rebalance: 0.642 * [1/3 2/3] => 0.214/0.428
Day 3 market: 0.214*0.4 + 0.428 => portfolio = 0.513
UPRO/EDV case (lose 60 percent of UPRO every day, don't rebalance)
UPRO after three days: 0.33 * 0.4^3 = 0.021
Portfolio: 0.021 + 0.67 = 0.691
SPY case (lose 20 percent every day)
SPY after three days: 0.8^3 = 0.512
PSLDX case (lose 20 percent of SPY part every day, rebalance back to 50/50 every day)
Day 1 market: 0.5*0.8 + 0.5 => portfolio = 0.9
Day 1 rebalance: 0.9 * [1/2 1/2] => 0.45/0.45
Day 2 market: 0.45*0.8 + 0.45 => portfolio = 0.81
Day 2 rebalance: 0.81 * [1/2 1/2] => 0.405/0.405
Day 3 market: 0.405*0.8 + 0.405 => portfolio = 0.729
I think this is right.
Re: Why not 100% PSLDX?
Heh, I'm afraid your post will largely fall on deaf ears. I've largely stepped back from posting about leveraged portfolios because I realized that either you have the right mathematical framework for thinking about it or you don't. After reading a lot of posts here, I've concluded that very few understand what volatility decay actually is or its relevance to geometric vs. arithmetic return. The math isn't really that hard, but first one has to realize that leverage really is a purely mathematical concept and there's no way around that fact. About 50 pages of discussion in the HFEA thread could be summarized cleanly in one page of mathematics.Semantics wrote: ↑Fri Jun 11, 2021 12:16 pmI'm not sure what your point is or what my screen name has to do with this. My point, since you don't seem to follow, is that volatility decay is simply a mathematical property of converting mean to geometric mean (look up the AM-GM inequality and Ito's Lemma). 1/3 of a 3x fund (rest cash) has exactly the same volatility of the 1x fund -- therefore the identical volatility decay. You would only suffer from greater volatility decay if you don't rebalance, and let your allocation to the 3x fund slip to below 1/3 of the portfolio value. I really don't understand what you're trying to argue here. I strongly recommend understanding the math before you even consider using leverage in a portfolio.firebirdparts wrote: ↑Fri Jun 11, 2021 10:48 amI figure when somebody uses the phrase "exactly the same volatility decay" and his name is "semantics" I don't have anything to say about that. let the reader act accordingly.
Anyway, it's not really realistic to expect even a minority of posters on a general finance forum to be familiar with either the AM-GM or Ito's lemma. Unfortunately, the logical conclusion is that it's not really reasonable to expect very many posters to understand all the nuances of leverage. This is a problem because you can't use leverage as just a black box. The difference between 2x and 3x leverage can be massive and the margin between an aggressive and a catastrophic amount of leverage is thin. A bit of complex mathematics is required to really understand factors as well, but the actionability there is pretty simple. Just add more value if you like value or add more momentum if you like momentum. To understand when and why you should rebalance a leveraged portfolio and how much leverage to take really requires understanding the nuts and bolts. There is a reason why leveraged ETFs come with warning signs at most brokers while even risky factor funds do not.
Re: Why not 100% PSLDX?
"The difference between 2x and 3x leverage can be massive and the margin between an aggressive and a catastrophic amount of leverage is thin. "
1 - So if that is true, why would people suggest anyone use 3x leveraged etfs if they could use something else? Which basically was my point in my first post.
"Explain to me again how UPRO/EDV is a worse option? I still don't get it. The daily rebalancing of UPRO helps to limit your losses in a major crash."
2 - So what is the reality that someone wants to have to rebalance their portfolio on a daily basis? Is their anyone who has posted they had a leveraged etf portfolio that they rebalanced it every day? And rebalanced it everyday in March and April of 2020?
3 - In HFEA , and 33 upro/67edv seems to be a hfea variant, although more it is often Mototrojans 43/57 ratios,. People have concluded quarterly rebalancing seems to have a higher return than monthly rebalancing. So, why would someone be daily rebalancing stock/ bond leveraged portfolio daily and not quarterly to begin with in hfea variant? Has anyone stated they have actually gone with daily rebalancing and shown that would bring them better returns than monthly or quarterly? I don't think that claim has been made or endorsed in the mega thousands of hfea posts.
Or have discussions left practical application behind?
1 - So if that is true, why would people suggest anyone use 3x leveraged etfs if they could use something else? Which basically was my point in my first post.
"Explain to me again how UPRO/EDV is a worse option? I still don't get it. The daily rebalancing of UPRO helps to limit your losses in a major crash."
2 - So what is the reality that someone wants to have to rebalance their portfolio on a daily basis? Is their anyone who has posted they had a leveraged etf portfolio that they rebalanced it every day? And rebalanced it everyday in March and April of 2020?
3 - In HFEA , and 33 upro/67edv seems to be a hfea variant, although more it is often Mototrojans 43/57 ratios,. People have concluded quarterly rebalancing seems to have a higher return than monthly rebalancing. So, why would someone be daily rebalancing stock/ bond leveraged portfolio daily and not quarterly to begin with in hfea variant? Has anyone stated they have actually gone with daily rebalancing and shown that would bring them better returns than monthly or quarterly? I don't think that claim has been made or endorsed in the mega thousands of hfea posts.
Or have discussions left practical application behind?
Re: Why not 100% PSLDX?
PSLDX should be 100/100, no? So the daily rebalancing would just lower the bond exposure and pay back borrowed money. The equity portion would stay the same as the overall portfolio value and be 0.512 to match the SPY case.Hydromod wrote: ↑Fri Jun 11, 2021 6:06 pmYou aren't rebalancing consistently.Semantics wrote: ↑Fri Jun 11, 2021 5:32 pm I failed to even notice in my earlier replies that this example is incomplete resulting in a seemingly backwards conclusion, in addition to being unrealistic. Let's look at the complete portfolio behavior assuming bond values don't change.
33% UPRO / 67% EDV: becomes 2% UPRO / 67% EDV = remaining portfolio value is 69%
100% SPY (or for PSLDX case: 100% SPY / 100% bonds / -100% cash) = remaining portfolio value is 51.2%
Explain to me again how UPRO/EDV is a worse option? I still don't get it. The daily rebalancing of UPRO helps to limit your losses in a major crash.
UPRO/EDV case (lose 60 percent of UPRO every day, rebalance back to 33 / 67 every day)
Day 1 market: 0.33*0.4 + 0.67 => portfolio = 0.802
Day 1 rebalance: 0.802 * [1/3 2/3] => 0.267/0.535
Day 2 market: 0.267*0.4 + 0.535 => portfolio = 0.642
Day 2 rebalance: 0.642 * [1/3 2/3] => 0.214/0.428
Day 3 market: 0.214*0.4 + 0.428 => portfolio = 0.513
UPRO/EDV case (lose 60 percent of UPRO every day, don't rebalance)
UPRO after three days: 0.33 * 0.4^3 = 0.021
Portfolio: 0.021 + 0.67 = 0.691
SPY case (lose 20 percent every day)
SPY after three days: 0.8^3 = 0.512
PSLDX case (lose 20 percent of SPY part every day, rebalance back to 50/50 every day)
Day 1 market: 0.5*0.8 + 0.5 => portfolio = 0.9
Day 1 rebalance: 0.9 * [1/2 1/2] => 0.45/0.45
Day 2 market: 0.45*0.8 + 0.45 => portfolio = 0.81
Day 2 rebalance: 0.81 * [1/2 1/2] => 0.405/0.405
Day 3 market: 0.405*0.8 + 0.405 => portfolio = 0.729
I think this is right.
So, to restate my original point, if you rebalance daily they are equivalent. And also, if you rebalance monthly or quarterly, then UPRO/EDV could do mildly better or worse, depending on the scenario and which of daily vs monthly volatility is higher. I suspect it's not worth worrying about, but I think whether UPRO/EDV would do better depends on whether bond returns have a mean-reversion tendency like equities have the past couple decades (making monthly volatility lower than daily volatility, and therefore monthly rebalancing slightly less volatility drag than daily rebalancing).
Re: Why not 100% PSLDX?
Yeah you are right, it's probably best to just point to the math so those interested can dig deeper. I don't have a background in finance and picked up most of what I know from yourself and others on the forum, and Prof Google. I do think there are some simple but overlooked takeaways (like so-called volatility decay having a mathematical formula, not some nebulous effect that shows up in backtests), so of these days if no one's done it already maybe I'll write up a backtest-free summary.langlands wrote: ↑Fri Jun 11, 2021 6:11 pmHeh, I'm afraid your post will largely fall on deaf ears. I've largely stepped back from posting about leveraged portfolios because I realized that either you have the right mathematical framework for thinking about it or you don't. After reading a lot of posts here, I've concluded that very few understand what volatility decay actually is or its relevance to geometric vs. arithmetic return. The math isn't really that hard, but first one has to realize that leverage really is a purely mathematical concept and there's no way around that fact. About 50 pages of discussion in the HFEA thread could be summarized cleanly in one page of mathematics.Semantics wrote: ↑Fri Jun 11, 2021 12:16 pmI'm not sure what your point is or what my screen name has to do with this. My point, since you don't seem to follow, is that volatility decay is simply a mathematical property of converting mean to geometric mean (look up the AM-GM inequality and Ito's Lemma). 1/3 of a 3x fund (rest cash) has exactly the same volatility of the 1x fund -- therefore the identical volatility decay. You would only suffer from greater volatility decay if you don't rebalance, and let your allocation to the 3x fund slip to below 1/3 of the portfolio value. I really don't understand what you're trying to argue here. I strongly recommend understanding the math before you even consider using leverage in a portfolio.firebirdparts wrote: ↑Fri Jun 11, 2021 10:48 amI figure when somebody uses the phrase "exactly the same volatility decay" and his name is "semantics" I don't have anything to say about that. let the reader act accordingly.
Anyway, it's not really realistic to expect even a minority of posters on a general finance forum to be familiar with either the AM-GM or Ito's lemma. Unfortunately, the logical conclusion is that it's not really reasonable to expect very many posters to understand all the nuances of leverage. This is a problem because you can't use leverage as just a black box. The difference between 2x and 3x leverage can be massive and the margin between an aggressive and a catastrophic amount of leverage is thin. A bit of complex mathematics is required to really understand factors as well, but the actionability there is pretty simple. Just add more value if you like value or add more momentum if you like momentum. To understand when and why you should rebalance a leveraged portfolio and how much leverage to take really requires understanding the nuts and bolts. There is a reason why leveraged ETFs come with warning signs at most brokers while even risky factor funds do not.
Re: Why not 100% PSLDX?
@Semantics @landlands The more time people like yourselves want to spend figuring out ways transpose these more complex mathematical topics into more approachable English, the better. Maybe some books or podcasts you know of, that focus on these topics?
Re: Why not 100% PSLDX?
Yeah it doesn't make practical sense to rebalance every day and nobody does that. My point was intended to show that the portfolios are essentially equivalent, which is easiest to see if you imagine daily rebalancing. In theory rebalancing frequency doesn't matter if the market is a random walk. In practice, in recent decades there's been a slight mean-reversion trend, meaning monthly volatility is lower than daily, such that rebalancing monthly has done a bit better (and quarterly even more so, as you say). But that may not remain true forever.
Re: Why not 100% PSLDX?
Helping it catch up at least. From July when I first purchased this fund, SPY is up 31.89% while PSLDX is now up 31.58%. Is it reasonable to feel impressed that, with all this weird interest rate stuff that has been going on recently, PSLDX has been nearly able to keep up with the S&P500?
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Re: Why not 100% PSLDX?
Unfortunately the S&P500 didn't come along for the ride today, so while PSLDX will be green, I think it'll be a modest gain.
Re: Why not 100% PSLDX?
Re: Why not 100% PSLDX?
Was just gonna post that. Very nice considering S&P500 was flat!jarjarM wrote: ↑Thu Jun 17, 2021 5:33 pm1.06% gain for the day, not bad comparing to S&P500, it would be nicer if stock side did a bit better.
Re: Why not 100% PSLDX?
yup, good day for bond heavy holdings.rchmx1 wrote: ↑Thu Jun 17, 2021 5:44 pmWas just gonna post that. Very nice considering S&P500 was flat!jarjarM wrote: ↑Thu Jun 17, 2021 5:33 pm1.06% gain for the day, not bad comparing to S&P500, it would be nicer if stock side did a bit better.
Re: Why not 100% PSLDX?
PSLDX unchanged today. I'll take it.jarjarM wrote: ↑Thu Jun 17, 2021 5:47 pmyup, good day for bond heavy holdings.rchmx1 wrote: ↑Thu Jun 17, 2021 5:44 pmWas just gonna post that. Very nice considering S&P500 was flat!jarjarM wrote: ↑Thu Jun 17, 2021 5:33 pm1.06% gain for the day, not bad comparing to S&P500, it would be nicer if stock side did a bit better.
- firebirdparts
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Re: Why not 100% PSLDX?
Yep. I like it. I wonder sometimes when they do that exactly zero if they just knock off early.
This time is the same
Re: Why not 100% PSLDX?
Me too, seems hard to arrive precisely at 0%.firebirdparts wrote: ↑Sat Jun 19, 2021 7:21 am Yep. I like it. I wonder sometimes when they do that exactly zero if they just knock off early.
Re: Why not 100% PSLDX?
I would guess it's a product of the fact that PSLDX always stays at a pretty small NAV which only uses whole cents? So any change +/- ~.1% will work out to less than a one cent increase/decrease, if I've done the math right. I would assume, on days where the increase/decrease is < .1% and so would be less than a one cent difference, they tack that change onto the next day's movement.jarjarM wrote: ↑Mon Jun 21, 2021 12:52 pmMe too, seems hard to arrive precisely at 0%.firebirdparts wrote: ↑Sat Jun 19, 2021 7:21 am Yep. I like it. I wonder sometimes when they do that exactly zero if they just knock off early.
Re: Why not 100% PSLDX?
Ah, that make sense. Thanksrchmx1 wrote: ↑Mon Jun 21, 2021 3:08 pmI would guess it's a product of the fact that PSLDX always stays at a pretty small NAV which only uses whole cents? So any change +/- ~.1% will work out to less than a one cent increase/decrease, if I've done the math right. I would assume, on days where the increase/decrease is < .1% and so would be less than a one cent difference, they tack that change onto the next day's movement.jarjarM wrote: ↑Mon Jun 21, 2021 12:52 pmMe too, seems hard to arrive precisely at 0%.firebirdparts wrote: ↑Sat Jun 19, 2021 7:21 am Yep. I like it. I wonder sometimes when they do that exactly zero if they just knock off early.
Re: Why not 100% PSLDX?
I brought PSLDX in kind from Schwab to JP Morgan. I bought more shares commission free. Doesn't appear to be any minimum. One purchase order was for $45. You must already own the fund in order to purchase.mutedbytes wrote: ↑Thu Jun 10, 2021 4:43 pmInteresting. Any minimums? How is JP Morgan in general service-wise, interface etc?
Re: Why not 100% PSLDX?
On days like this I get genuinely excited to see what PSLDX's NAV will be. lol
Re: Why not 100% PSLDX?
Re: Why not 100% PSLDX?
PIMCO knows we're on tender hooks so of course they're (at least at Schwab) taking their sweet time. haha
Re: Why not 100% PSLDX?
i know, Schwab is way late.rchmx1 wrote: ↑Fri Jul 02, 2021 5:40 pmPIMCO knows we're on tender hooks so of course they're (at least at Schwab) taking their sweet time. haha
Re: Why not 100% PSLDX?
1.13%, not bad for a day where SPY return 0.75%
Re: Why not 100% PSLDX?
Very nice extra helping of greens on the plate, thanks to the bond portion. After a rough stretch to begin the year, we're having more and more days where the strategy is working to increase returns. Glad to be in this fund.
- firebirdparts
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Re: Why not 100% PSLDX?
Was it more fun just because it was up more than 1%,or was there something special about today?firebirdparts wrote: ↑Fri Jul 02, 2021 10:33 pm I do look at it every day. But it was more fun today.
I own a little psldx (little being the operative word) mostly to better understand it. But I don't follow the daily prices. So I am wondering if am missing something.
Re: Why not 100% PSLDX?
PSLDX is fun to have when:noraz123 wrote: ↑Fri Jul 02, 2021 11:46 pmWas it more fun just because it was up more than 1%,or was there something special about today?firebirdparts wrote: ↑Fri Jul 02, 2021 10:33 pm I do look at it every day. But it was more fun today.
I own a little psldx (little being the operative word) mostly to better understand it. But I don't follow the daily prices. So I am wondering if am missing something.
Both stocks and bonds are up (meaningful outperformance), or
when stocks are down but bonds are up. (modest outperformance)
PSLDX is not so fun to have when:
Stocks are up but bonds are down (modest underperformance), or
(especially) when both stocks and bonds are down. (meaningful underperformance)
So, today was fun because both stocks and bonds were up, so we knew we'd be getting extra green when the NAV updated. It is these kind of days which are responsible for this fund's historical outperformance of its benchmark, so when they come around, we, it's adherents, enjoy raising a glass.
Re: Why not 100% PSLDX?
Thank you for the explanation! Very helpful.rchmx1 wrote: ↑Sat Jul 03, 2021 3:25 amPSLDX is fun to have when:noraz123 wrote: ↑Fri Jul 02, 2021 11:46 pmWas it more fun just because it was up more than 1%,or was there something special about today?firebirdparts wrote: ↑Fri Jul 02, 2021 10:33 pm I do look at it every day. But it was more fun today.
I own a little psldx (little being the operative word) mostly to better understand it. But I don't follow the daily prices. So I am wondering if am missing something.
Both stocks and bonds are up (meaningful outperformance), or
when stocks are down but bonds are up. (modest outperformance)
PSLDX is not so fun to have when:
Stocks are up but bonds are down (modest underperformance), or
(especially) when both stocks and bonds are down. (meaningful underperformance)
So, today was fun because both stocks and bonds were up, so we knew we'd be getting extra green when the NAV updated. It is these kind of days which are responsible for this fund's historical outperformance of its benchmark, so when they come around, we, it's adherents, enjoy raising a glass.
Re: Why not 100% PSLDX?
Man, the bond portion of this fund has been killing it the last two days. Up like .67% with the S&P500 was down around .2% yesterday, and up 1% when the S&P500 is up .34% today. It's nice to start breaking out of that stretch where the bond side was dragging down this fund's performance.
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Re: Why not 100% PSLDX?
To set our status: Retired 51 year old, 47 year old wife, 15 year old kids in private school, no debt (no mortgage), kids education fully funding sitting in 529, $8.5M net worth roughly.
PSLDX is a big part of our income stream. When I retired I moved $1M from VWUAX to PSLDX in a taxable as no 401K/Roth IRA space. This is generating about $10k a month in income which funds our life with excess going into emergency fund.
This has allowed me to continue to hold a significant amount in VT as I did during accumulation phase but not need to touch it. As long as PSLDX keeps generating my income stream no need to withdraw from it.
As for tax - If I was still working I would be paying tax on the income, so paying tax on the PSLDX churn is no different; except I am not working for the privilege of paying taxes
PSLDX is a big part of our income stream. When I retired I moved $1M from VWUAX to PSLDX in a taxable as no 401K/Roth IRA space. This is generating about $10k a month in income which funds our life with excess going into emergency fund.
This has allowed me to continue to hold a significant amount in VT as I did during accumulation phase but not need to touch it. As long as PSLDX keeps generating my income stream no need to withdraw from it.
As for tax - If I was still working I would be paying tax on the income, so paying tax on the PSLDX churn is no different; except I am not working for the privilege of paying taxes
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Re: Why not 100% PSLDX?
This sounds a lot like what I hope to do. Are you reinvesting the distributions then selling off shares to meet expense needs?buster1971 wrote: ↑Wed Jul 21, 2021 8:11 am PSLDX is a big part of our income stream. When I retired I moved $1M from VWUAX to PSLDX in a taxable as no 401K/Roth IRA space. This is generating about $10k a month in income which funds our life with excess going into emergency fund.
This has allowed me to continue to hold a significant amount in VT as I did during accumulation phase but not need to touch it. As long as PSLDX keeps generating my income stream no need to withdraw from it.
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Re: Why not 100% PSLDX?
@buster1971
What brokerage do you hold PSLDX in your taxable account? I tried IBKR but seems like it is restricted to buy PSLDX in taxable.
What brokerage do you hold PSLDX in your taxable account? I tried IBKR but seems like it is restricted to buy PSLDX in taxable.
Re: Why not 100% PSLDX?
You can try Ally or Etrade. Ally charges $9.99 and Etrade $19.99 per tradechintu2005 wrote: ↑Thu Jul 22, 2021 12:40 pm @buster1971
What brokerage do you hold PSLDX in your taxable account? I tried IBKR but seems like it is restricted to buy PSLDX in taxable.
Re: Why not 100% PSLDX?
I'm very excited about this fund and have been using it as my exclusive Roth IRA holding for a few months. I'm considering additional investment with self directed 401k as well. For those who are invested, how did you decide about using this fund vs alternatives such as the HFEA UPRO/TMF 55/45 strategy. Also, what are you doing about international diversification if any?
I've been putting most of taxable investments this year into NTSX, roth IRA in PSLDX and 401k currently SCHB (schwab total US stock market). But that does leave me quite underweight on international which I'm pretty comfortable with but is at least a potential weakness.
It also seems like a good idea as one is approaching withdrawal phase to move a component of the portfolio to NTSX for a bit of safety and better drawdown protection?
I've been putting most of taxable investments this year into NTSX, roth IRA in PSLDX and 401k currently SCHB (schwab total US stock market). But that does leave me quite underweight on international which I'm pretty comfortable with but is at least a potential weakness.
It also seems like a good idea as one is approaching withdrawal phase to move a component of the portfolio to NTSX for a bit of safety and better drawdown protection?
Re: Why not 100% PSLDX?
You could consider using NTSI in place of a portion of NTSX as your international holding in taxable if you want more international weight in your portfolio. Many also consider the S&P 500 companies to be sufficiently diversified globally to count as a reasonable international holding and don't add any specific international funds to their portfolio.
Last edited by kevinf on Mon Jul 26, 2021 4:17 pm, edited 1 time in total.
Re: Why not 100% PSLDX?
Over the past year since I started really investing, my admittedly very aggressive AA has grown to about 51% of a mix between 3x and 2x HFEA, 24% PSLDX, 12% NTSX, and 13% mixed between some international, some broad index, some small cap, and a few individual stocks for covered call strategies. Basically, I viewed PSLDX as a slightly more conservative option compared to HFEA, and NTSX as more conservative option compared to PSLDX, which is definitely how they have behaved. Feel the same about international. At some point I plan to direct a larger portion of new money in that direction, but that hasn't happened yet.RosieQ wrote: ↑Mon Jul 26, 2021 1:16 pm I'm very excited about this fund and have been using it as my exclusive Roth IRA holding for a few months. I'm considering additional investment with self directed 401k as well. For those who are invested, how did you decide about using this fund vs alternatives such as the HFEA UPRO/TMF 55/45 strategy. Also, what are you doing about international diversification if any?
I've been putting most of taxable investments this year into NTSX, roth IRA in PSLDX and 401k currently SCHB (schwab total US stock market). But that does leave me quite underweight on international which I'm pretty comfortable with but is at least a potential weakness.
It also seems like a good idea as one is approaching withdrawal phase to move a component of the portfolio to NTSX for a bit of safety and better drawdown protection?
Re: Why not 100% PSLDX?
For international exposure, try NTSI (international core) or NTSE (emerging market) but both uses US treasury for the bond portion.RosieQ wrote: ↑Mon Jul 26, 2021 1:16 pm I'm very excited about this fund and have been using it as my exclusive Roth IRA holding for a few months. I'm considering additional investment with self directed 401k as well. For those who are invested, how did you decide about using this fund vs alternatives such as the HFEA UPRO/TMF 55/45 strategy. Also, what are you doing about international diversification if any?
I've been putting most of taxable investments this year into NTSX, roth IRA in PSLDX and 401k currently SCHB (schwab total US stock market). But that does leave me quite underweight on international which I'm pretty comfortable with but is at least a potential weakness.
It also seems like a good idea as one is approaching withdrawal phase to move a component of the portfolio to NTSX for a bit of safety and better drawdown protection?
https://www.wisdomtree.com/strategies/e ... -core-etfs
For NTSX vs HFEA discussion, there was a thread on that specific topic recently (pro and con).
viewtopic.php?t=347207
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Re: Why not 100% PSLDX?
I use it as a substitute for the US market in my 401k. I am not allowed to use UPRO in my 401k (at Fidelity) and I suppose they wish I didn't use PSLDX either. I have plenty of international diversification, but in my 401k that doesn't come with any leverage and there's nothing I can do about that at this time.RosieQ wrote: ↑Mon Jul 26, 2021 1:16 pm I'm very excited about this fund and have been using it as my exclusive Roth IRA holding for a few months. I'm considering additional investment with self directed 401k as well. For those who are invested, how did you decide about using this fund vs alternatives such as the HFEA UPRO/TMF 55/45 strategy. Also, what are you doing about international diversification if any?
This time is the same
Re: Why not 100% PSLDX?
Another good day for PSLDX compare to SP500. Now PSLDX outperformed SPY in total return over the last 6 months (17.95% vs. 16.99%). thought it's interesting to share.
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