Author Archives: Charles Lynn Bolin

About Charles Lynn Bolin

Lynn Bolin retired in June 2022 and is immensely enjoying the more relaxed lifestyle. He spends his extra time with family, studying the economy and investing, at the gym, exploring the parks, and tasting the culinary pleasures at the local restaurants and Farmer’s Markets. After spending over thirteen years working internationally, he is enjoying exploring nature closer to home. Lynn graduated with an Engineering degree from New Mexico Tech and an MBA from Eastern New Mexico University. He worked as a Technical Services Manager over engineering and other functions. He enjoys building investing models in his spare time and writes articles for Seeking Alpha.

Evaluating Tax-Exempt Funds

By Charles Lynn Bolin

With yields at high levels and inflation falling, I sold a poor-performing stock to buy two Tax-Exempt bond funds. In this article, I look at municipal money market and bond funds for tax-efficient accounts. I began this search by looking at funds that are available at Fidelity or Vanguard with no transaction fees. I further based the selection on both longer and shorter performance relative to peers, Fund Family Rating, Fidelity Fund Picks, and Morningstar Ratings among other factors.

This article is Continue reading →

Looking Ahead with Vanguard

By Charles Lynn Bolin

Vanguard’s clients have grown from about 20 million with $3.8 billion in assets in 2016 to 30 million now with nearly $8 billion in assets. Vanguard is the world’s largest mutual fund company with more market share of mutual funds than the next three competitors combined. For this article, I read Inside Vanguard: Leadership Secrets from the Company That Continues to Rewrite the Rules of the Investing Business by Charles D. Ellis, a longtime director of Vanguard. I want to know Continue reading →

Battle of the Titans for Portfolio Management – Fidelity vs Vanguard

By Charles Lynn Bolin

Asset Manager Titans Fidelity and Vanguard have options for portfolio management that vary allocations across asset classes over time which include assessments of long-term market trends. Fidelity has the Business Cycle Approach while Vanguard has the time-varying-asset approach based on the Vanguard Capital Markets Model (VCMM). In this article, I briefly describe Continue reading →

Is Bigger Better?

By Charles Lynn Bolin

I have often heard that smaller funds are able to outperform larger ones because they can be nimbler. This article started as a search for the best performing “core” funds over the past fifteen years, but I started over several times as I challenged my own search criteria to select only large funds. My assumption was that success builds upon success and investors invest more in funds that are doing Continue reading →

Helping a Friend Get Started with Financial Planning

By Charles Lynn Bolin

A close friend, who I will call Carol for this article, wanted to meet to discuss whether she should get a Financial Planner. Here is her situation and what she is interested in learning:

Carol and her husband were good savers and earned pensions and Social Security. He passed away a couple of years ago after a prolonged illness. Their focus had been on healthcare needs and not on financial planning. She also received an inheritance from her parents. Carol explained that she had savings scattered at multiple banks in savings accounts, Inherited IRAs, Traditional IRAs, and Roth IRAs. She had questions about why she should invest when her living expenses were met Continue reading →

Recession Watch

By Charles Lynn Bolin

The Chronology of the Economic Cycle provided by Joseph Ellis in Ahead of the Curve is an interesting chart that shows the ripple effect from left to right of inflation and interest rate increases across the economy over the next six to twenty-seven months. In Figure #1, I added my subjective assessment of whether the indicator level is currently positive (blue +) or negative (red -) for the Investment Environment and the direction of change, whether it is improving (red up arrow) or softening (red down arrow). Most of the indicators are softening, but not at a level to be considered negative (contracting) for the Continue reading →

Looking Beyond the Next Recession

By Charles Lynn Bolin

The Federal Open Market Committee minutes from March state that the staff’s projection “included a mild recession starting later this year, with a recovery over the subsequent two years”. Participants “generally expected real GDP to grow this year at a pace well below its long-run trend rate.” In addition, the Conference Board forecasts “that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a recession starting in mid-2023”.

With a high probability of recession and a high return on short-term cash, Continue reading →

Investor Life Cycle and Lessons Learned from Past Recessions

By Charles Lynn Bolin

I have made many mistakes investing and am an example that if one reflects upon their mistakes, they can recover. As George Santayana said, “Those who cannot remember the past are condemned to repeat it.”

I received assistance from Murray in writing this article.

In an AAII Newsletter, Warren Buffet’s mentor Benjamin Graham described individual investors as either “Defensive” or “Enterprising/Aggressive” based on how much “intelligent effort” they were willing or able to devote to investing. The Defensive Investor included professionals without much time and young investors without much investing experience.

In this article, I review Continue reading →

Bond Funds for a Recession and Falling Rates

By Charles Lynn Bolin

Bond investors think they’ve seen it all.

They are wrong about that. For people who first began investing in bonds within the past 4o years – say, since 1982 – the bond market must seem like a source of perpetual, reassuring, and unrelenting gain. Just chuck some cash into the Treasury market or investment-grade corporates, and voila! Instant wealth.

In that same period, global equity investors have been Continue reading →

Looking Beyond 2023 Investing – Lies and Statistics

By Charles Lynn Bolin

Mark Twain wrote in 1907, “There are three kinds of lies: lies, damned lies, and statistics.” The differences in opinion about soft or hard landings center on how trends are measured, data accuracy, revisions, seasonal adjustments, and which data to follow. I provide Chart #3 of what I am monitoring over the next six months as the story about soft or hard landings unfolds. Continue reading →

To Sell or Not to Sell? (REMIX, PQTAX, GPANX, COTZX)

By Charles Lynn Bolin

This is my annual assessment of the funds that I own and whether it makes sense to hold them with my annual outlook, as described in this month’s companion article. My outlook is “Risk Off” because of economic uncertainty, plus bonds are now paying an attractive yield. The funds assessed in this article exclude bond funds, individual stock, and American Century Advantis All Equity Markets (AVGE). As interest rates rose and stocks and bonds fell, I gradually sold my most volatile funds and bought short-term ladders of certificates of deposit and Treasuries to lock in higher yields. With interest rates higher, I now ask myself, would I rather own my remaining funds in my intermediate buckets or make four or five percent in safer investments? That is the question.

I use the “Bucket Approach” and have Fidelity Wealth Management manage my longer-term portfolios, which collectively resemble Continue reading →

One of a Kind: American Century Avantis All Equity Markets ETF (AVGE)

By Charles Lynn Bolin

My last article on Seeking Alpha suggested that value, international, small caps, and emerging markets would outperform over the coming years. David Snowball wrote “The Investor’s Guide to 2023: Three Opportunities to Move Toward” last month along the same lines and offers his insight into these asset classes along with some excellent funds. I follow the Bucket Approach, where some Buckets have similarities to Dr. Snowball’s “Terrified Investor,” “Exhausted Investor,” or “Enterprising Investor.” A Reader on Seeking Alpha asked my opinion about Continue reading →

Fortune favors the prudent

By Charles Lynn Bolin

(And by implication, frowns on celebrity endorsements)

Happy New Year! I wish everyone a prosperous 2023. It is that time of year again when investment companies, analysts, and pundits create outlooks for the coming year. The quote attributed to Dwight D. Eisenhower that “Plans are useless, but planning is indispensable,” is applicable as there are risks to the outlook, which is the first section in this article. The second section is my outlook and strategy for 2023. The final section is the outlook from the Federal Reserve, The Conference Board, and Vanguard. Links to other outlooks are included in the Appendix.

Thanks to the notice by David Snowball, I have become a premium subscriber to The Independent Vanguard Adviser. I use the Continue reading →

Worries About Inflation Giving Way to Recession

By Charles Lynn Bolin

I hope that Readers enjoyed their Thanksgiving as much as I did and wish everyone a safe and happy holiday season and a prosperous new year.

I expect this Santa Claus Rally will give way to a New Year’s hangover as investors start to anticipate a recession more than they fear inflation. On November 10th, the Consumer Price Index for all Urban Consumers was released to show the inflation rate increased by 7.76% from a year ago and 0.44% from the previous month which is still a high annual rate of 5.3%. The minutes of the November Federal Open Market Committee Meeting provide insights: Continue reading →

Federal Reserve Rate Hikes – The Next Nine Months

By Charles Lynn Bolin

2023 Sleeping Bears in Waiting

We are in a classic late stage of the business cycle with the Federal Reserve raising rates to reduce demand in order to control inflation. What is different this time is that the inflation is likely to be higher for longer because it is a global issue resulting from a combination of factors, including COVID-related supply chain disruptions and related stimulus, an extended period of low-interest rates and easy monetary policy, and the Russian invasion of Ukraine that, in addition to being a tragic loss of lives, also disrupted supply chains. I look at the base case of the Federal Reserve raising the Fed Funds (FF) target rate in November and December and holding the rate relatively constant next year. The next six to nine months are key to determining Continue reading →

Shining the Light into Black Box Funds

By Charles Lynn Bolin

Source: PublicDomainPictures.net

A reader on the Mutual Fund Observer Discussion Board asked “how do you feel about putting monies into funds that have a somewhat ‘black box’ dynamic to them…yes, they explain their positions but sometimes I wonder, how safe of an investment are some of these funds?”

For those not familiar with black box investing, Investopedia explains: “a black box is a device, system, or object which produces useful Continue reading →

Fidelity Actively Managed New Millennium ETF (FMIL), September 2022

By Charles Lynn Bolin

Since retiring two months ago, I purchased the actively managed Fidelity New Millennium ETF (FMIL) for diversification. It is one of four actively managed equity ETFs offered by Fidelity that has more than $50M in assets. My introduction to FMIL came from an article by Tezcan Gecgil, “3 Fidelity ETFs To Diversify Your Portfolio In August,” at Investing.com, in which she highlighted that FMIL has done relatively well year-to-date. I then read “ETF of the Week: Fidelity New Millennium ETF (FMIL)” by Aaron Neuwirth from VettaFi, formerly known as ETF Database, which summarizes a podcast by ETF Trends CEO Tom Lydon in “ETF of the Week” with Chuck Jaffe Continue reading →

Here be dragons: Data-driven caution for the market ahead

By Charles Lynn Bolin

Medieval world maps were speculative documents, incorporating what the cartographer knew to be true, but that often left a lot of blank space on the map. The places where the mapmaker could offer only uncertain guidance were marked with the Latin legend “Hic sunt dracones.” That is, “here be dragons.”

To be clear, these were not stupid or credulous guys. They were just guys who knew the world was a dangerous place, and the uncharted regions were Continue reading →

Retirement Planning in the Shadow a Recession

By Charles Lynn Bolin

I am now in my fourth week of retirement. This article is the third of a three-part series describing my experiences as I retire. It builds upon “Certainty of Death and Taxes,” where I describe how taxes, social security, and Medicare may impact retirement financial plans. The topics covered in this article are:

  1. Investment Environment: A recession is becoming more likely in 2023
  2. Sequence of Return Risk: How a recession early in retirement can damage retirement plans
  3. Tax Efficiency: Optimizing lifetime after-tax retirement income
  4. Withdrawal Strategy: Using a basket of accounts to reduce taxes
  5. Investment Strategy: The extended Bucket Strategy

Continue reading →