No. of Recommendations: 1
Welcome back Charlie,

I hope the “fish were jumping”!

I enjoy reading your portfolio numbers, so I will share mine as well. Maybe someone can learn something from mine, just as I have learnt from yours.

The purpose of my bond portfolio is to provide a long term retirement “income stream” to compliment the dividend and growth returns from my equity investments. My thinking is that there will be very little growth in the U.S. economy over the next decade, so I’m investing in Chinese equities for growth and U.S bonds for income. Consequently, I’m looking to accumulate a “high yield (aka junk)” bond portfolio that throws off high rates of income. I’m prepared to take the risks necessary in search of greater rewards.

So far, I have very narrow parameters. I’m searching for bonds that have a minimum Current Yield of 10% and maybe 12% YTM, and have a good chance of SURVIVING the current recession. In general, I’m trying to stay away from C rated securities, but I’m prepared to make some exceptions. My basic “buying lot” is 2 bonds, so that I can add to a given issue if bargains show up in the future. I’d like to average 1 or 2 buys each week. My intention is to hold all positions to maturity (or be called).

What have I learnt so far? Well, I should have been more aggressive at the start. Prices have substantially appreciated over the last 6 weeks. When I look back compared to today’s prices, just about everything was cheap then (but I didn’t know it). I could have bought as much as I wanted. Now, I have to work hard and be patient in order to find good value within my parameters. But there is an advantage to having strict parameters that need constant hunting for purchases. I’m beginning to get to know the companies in my market and I’m getting a feel for what each issue and rating is worth. When a good buy shows up, I’m able to grab it immediately. I find I’m a real “Junkman”. Not only am I buying low quality issues, but I’m picking off the 1 and 2 single lots that other investors consider too small to bother with. I’ll take anything that looks cheap.

So this is an experiment to see how well an individual Junk bond investor can do over the years. I’m not trying to beat anyone other than my 10% CY goal. I think 10% should be enough to keep me ahead of inflation over the next decade or so (we will see).

I will post my current portfolio in a separate post due to formatting problems I’m having (I don’t know how to format spreadsheet data).

Howard
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