10/11/2012 Live Update

[Mr. BachNut]

Today is the weakest bounce from a local low since the June low, a period that has had like six bounces.
The bounce was sold into. The rest of the herd probably noticed...

[jarbo456]

PHK drives it's high yield through lower grade credits and duration. most credit analysts will argue against holding duration risk at this point in time.

PHK trades like a stock, handles dividends like a stock. PHK is a bond fund. A certain % of bonds in the fund will fail, but in the aggregate, dividends are what matter.

anyone considering these types of "actively managed income focused bond funds" should take a look at their expense ratios which are quite high comparatively speaking.

Expense ratios don't matter to me. What matters is the gain (sell price minus buy price minus trading fees), and the actual dividends. Everything has an expense ratio, even a stock.

i'm not looking to argue with you, but i think you missed my point.

it seemed in your statement that you were saying look at yield only - subsequently suggesting that PHK is a better substitute for TLT. i'm not arguing the merits of trading either one, but your base argument is incorrect. they are not equivalent, just as you would not suggest to someone who wants to buy PG that they can just go and buy ARR because afterall, ARR is trades like a stock, and pays dividends even BETTER than average stocks (monthly basis) and has a yield of nearly 15%.

as far as stocks having "expense ratios" - a tertiary level of fees above and beyond cap x and or company specific expenses, fees specific to the operation and management of a "fund" vehicle - is news to me. you may not deem expense ratios important, but a long term portfolio strategy should at least be partially aware of the affects of expenses to overall performance...or not.

i'm not going to address this again because i have a feeling the original query has been lost.

i'm sure your suggestion was offered with the best of intentions; i'm merely pointing out that PHK and TLT are not even remotely similar.

have a good day guys.

[Petsamo]

PHK and TLT are not even remotely similar.

You are technically correct, but in my opinion PHK can serve as a substitute for dividend stocks or bond funds.
I'm willing to bet that PHK, being a fund, can use the same claim as gold sellers, "PHK has never been worth zero". PHK has an advantage, it gives very nice dividends.

[rc1269]

most credit analysts will argue against holding duration risk at this point in time.

I'm watching your posts more carefully after that one statement. Spot on!

except, most credit analysts aren't the ones making duration calls...

[rc1269]

PHK and TLT are not even remotely similar.

You are technically correct, but in my opinion PHK can serve as a substitute for dividend stocks or bond funds.
I'm willing to bet that PHK, being a fund, can use the same claim as gold sellers, "PHK has never been worth zero". PHK has an advantage, it gives very nice dividends.

I didn't read all the prior posts on the subject, but I'm not sure why or how TLT and PHK ended up being viewed as comps. PHK is a high yield corp bond fund. TLT is a long duration treasury fund. high yield doesn't trade like treasuries. they do both pay a coupon, but that's about where your return similarity is likely to end. if long rates spike or the yield curve steepens, you will get crushed on TLT. high yield bonds are generally shorter maturity and higher coupon, ie lower duration. you won't get crushed in the same way. not to mention if rates are going up that typically means the economy is getting better, meaning high yield spreads are tightening = PHK does well, all things equal. apples and oranges