If gold drops further I’d put a toe back in the water. Sold OPGSX @$18 couple months ago. Has dropped to around $16.50 today. I’m really concerned about the messages coming out of Washington. Corker, McCain, Flake and many former military & civilian leaders have been really unloading. (Also former Presidents of both parties.) Regardless of your affiliation, this kind of turmoil can’t bode well for the nation or the stock market.
https://www.usnews.com/news/business/articles/2017-10-24/trump-plans-lunch-with-gop-senators-as-focus-turns-to-taxes

OK. The 64K question for me is how much of this fund or Long/Short funds should be in an average Joe Tentpeg investor's Asset Allocation. 5-10-20%? What is a meaningful amount that will meaningfully dampen volatility and maybe contribute to the portfolio's return. Is it reasonable to add to a retiree's portfolio?

2 days before PIMCO dropped their Calif Muni Fund lll's dividend by a Whopping 25%, their Semiannual report said everything was rosy. The report bragged exposure to revenue, healthcare & tobacco-settlement bonds OUTPERFORMED the muni markets, with good maturity durations all contributing to performance. TWENTY FIVE PERCENT. In one day! Isn't that deceptive marketing?

@bee How about playing CLUE ?
Regards,
Ted :)

@PBKCM, O.K. let's narrow this down by deductive reasoning.
According to my screener (Morningstar Screener) It is 1 of nearly 15,0000 funds.
My first question...What is your fund's morning star rating (1-5*)?

Just watching paint dry and reading over the many comments. Thought I’d attempt to gain a better market perspective by grouping a few of the responses. Apologies in advance for the likely inaccuracies and/or omissions. Not scientific. Feel welcome to fill-in the blanks. Thanks to the Pudd for the thread.
Bullish Sentiment
“I have been DCA into PRGTX - TRP Global Technology since it was a new fund and the price has doubled since then. Hopefully the fund continues to run wild” ...Jafink63
“Ah, yes....new funds. They are great. Big up side potential as you get the P.M.'s. Best picks with all the money coming in. Yep, been there done that. Looks like you hit a homer, big guy! If I were you, I'd ride on. Tech is only going to get bigger as time rolls on.” Puddnhead
“On the equity front: May add a tad to certain REITS (VTR). Possibly also small positions in GE & GIS (TBD). Just re-entered small position in AMZN and a position in UTG on the price-weakness surrounding the rights-offering. Bought a small, starter position GBTC (the bitcoin trust) --as a pure speculation.” Edmond
-
Bearish Sentiment
“In a bit of good fortune, the nice little run-up has bumped two of my funds in the IRA to hit the dollar threshold for a haircut... I'm happy to take some profits off the table before that decision is announced”. PressumUP
“I remain in the cash build mode within my mutual fund portfolio due to a richly priced market.
... More pondering to do while I await the next pullback.” Old Skeet
“I remain invested, but at the high end of my allowable cash position.” hank
“With the bull ongoing, am thinking of selling a little even in roth accounts and letting it sit as cash, or in, like, GABCX”. davidrmoran
“I'm looking to sell some equities & take some risk off the table too”. expatsp
”... lowering equity exposure while allowing room to run still”. jlev
“The stock market is historically overpriced, and becoming more so by the day.”
David Snowball - October 1, 2017 Commentary https://www.mutualfundobserver.com/2017/10/
“I have to be put into the bearish camp, near retirement and more worried about "the return of my capital than the return on my capital". I have left my long term funds alone but have ratcheted down equity exposure over the year to about 30% to 35% and emphasizing short duration bonds.” sma3
Undetermined
“Opened a small position in TUHYX ...” carew388

I understand your argument with (b), but (a)? If your income is large enough to be able to max out contributions to your 401(k) and IRA ($24k next year), you really shouldn't be too worried about money.

IRA contributions are still 5500/6500 and in my view are generally useless compared to the 18K+ in the 40X accounts....it should be a similar amount, in my opinion. What I meant to say was that sure, if you are able to max out your 40X good for you -- but that shouldn't mean that one ignores investing more $$$ in a taxable account anyway if they're able to.

FYI: Hedge funds entered 2017 coming off their eighth-straight year of trailing U.S. stocks (as measured by the S&P 500 Index) by significant margins.
Regards,
Ted
http://www.etf.com/sections/index-investor-corner/swedroe-why-do-hedge-funds-exist

boy, the args against being in SP500 are weak, aren't they

A different take on the mini-selloff, focusing on PCI: the thesis is that slight ticks down in the rate of NAV appreciation were the trigger. (Could apply to most Pimco CEFs.) The author traces the phenom back a few months.
Imho, it's a little hard to believe all the sellers noticed the slight, short-term leveling off of NAV gains, which were easy to miss and still beat the distribution rate; maybe a few got the ball rolling and general selling followed (?).
Hat tip to Aalan on M* for the link.

@msf: Thanks for the fact-checking. Sloppy work on my part. I guessed at the 1.5% figure by discounting the reported 30-day SEC yield of 1.73% for TRBUX somewhat. What I overlooked was that it’s much harder nowadays for managers to play games with their consumer level money market funds (ala Dick Strong / Mercury Capital) with those new reforms in place. Have corrected my numbers in the above post.
Something I might have added is that the SEC reforms forced money market funds to drop some higher tier corporate debt that the ultra shorts were all too happy to pick up. So, indirectly, the reforms aided the ultra shorts’ relative performance. That’s the point where I moved all my cash with TRP from money market to ultra short.

I agree with nearly everything hank wrote. The one exception is the juxtaposition of these two bullet items:
- Short term rates have risen since 2011, albeit not by much. But compared to a half-percent back in 2011, the near 1.5% available in money market funds today looks better than it did by comparison in 2011. And rates are expected to rise further.
- Recent SEC mandated rules on money market funds have arguably made them safer in comparison with RPHYX than they might have appeared back in 2011.
What the SEC did was bifurcate MMFs into safer ones (government MMFs) and ones with higher, or at least different, risks (prime MMFs). The risks are different because they may now slow redemptions or impose redemption fees in times of stress.
I've talked with Fidelity about this, and as near as we can figure out (didn't get a clear answer), it's possible to be charged a redemption fee for merely writing a check. This can happen if you're using a prime MMF (position fund) as a backup for your core account, and that check draws from the prime MMF at a time it's imposing redemption fees.
The safer funds (second bullet item) are government funds. These pay less than prime MMFs, and none is currently above 1% (first bullet item). Very close though (0.99%), and worth considering for their added convenience if the one you want is available NTF at your usual brokerage.
Current top MMF rates:
http://www.barrons.com/public/page/9_0204-trmfy.html

To put this in perspective, the new DOL regs for fiduciaries allow different levels of compensation for selling different categories of products, up to a certain level.
BICE allows higher compensation for selling complex products that require more work to explain to the customers. (DOL FAQ: "variation [in commission] is permitted ... based on neutral factors, such as the time and complexity associated with recommending investments".) This arises from the reasonable compensation rule.
At the same time, BICE forbids the additional compensation to be so high as to create an incentive to push these products. More generally (again from DOL FAQ) "financial institutions cannot 'use or rely upon quotas, appraisals, performance or personnel actions, bonuses, contests, special awards, differential compensation or other actions or incentives that are intended or would reasonably be expected to cause Advisers to make recommendations that are not in the Best Interest of the Retirement Investor.'"
If it takes someone twice as much time and effort to sell product A as product B, and compensation is equal, that person has a disincentive to sell (or "push", as Ms. Morgenson wrote) product A. That is true regardless of how much more or less profitable one product or the other is for the company. Unequal compensation for different products can be reasonable. Whether the differences merely equalize the sales incentives for different products or bias them (presumably toward the more profitable product) is a matter of the magnitude of the differences in compensation.
According to the DOL, the mere existence of compensation differences does not automatically create an incentive to sell one over the other, Ms. Morgenson aside. Yet she leaps immediately to the conclusion that it must, with no numbers, no explanation.
The TIAA Form ADV Part 2A that she cited mirrors the DOL regs: "TIAA’s compensation philosophy aims to reward Advisors with appropriate compensation, recognizing the degree of effort generally required of the Advisor in gathering and retaining client assets in appropriate TIAA accounts, products and services offered by TIAA affiliates."
Ms. Morgenson also leaps from writing about "advisers" in the first paragraph (who are bound by fiduciary duty, BICE, etc. not to be incentivized to "push" higher profit products) to "sales representatives" in the second paragraph, who are under no such constraints. Which one is it? Is the undisclosed complaint talking about sales reps or advisers?
That matters because, as I stated before, while this doesn't help TIAA's reputation, it doesn't paint them as an exceptionally bad actor. I've written before about Fidelity's reps having similar compensation schedules. Here's Fidelity's 2017 Introduction to Representatives’ Compensation.
"Certain representatives also receive differing compensation for different product types, for example, managed account and insurance product sales, which require more in-depth engagement with clients, provide more compensation than products such as money market funds." For example, Fidelity reps get quarterly compensation of 1 basis point for investments in MMFs, while10 basis points for investments in Fidelity's Portfolio Advisory Services and/or insurance products.
For anyone who's suggested going to a brokerage to discuss ideas "for free", tell me again how great a bargain that is.

I searched the fund and found volumes of discussions dating way back to July, 2011.
Hear’s one of the earliest - Riverpark Short-Term High Yield Fund Looks Like A Great Place to Park Money: https://mutualfundobserver.com/discuss/discussion/748/riverpark-short-term-high-yield-fund-rphyx-looks-like-a-great-place-to-park-money
Another early discussion - Riverpark Short-Term High Yield Fund - What Role in Your Portfolio?: https://mutualfundobserver.com/discuss/discussion/3384/rphyx-riverpark-short-term-high-yield-what-role-in-your-portfolio
With the proviso that I’ve never owned this fund and have only a limited understanding of the methodology employed, I’ll nonetheless venture a few thoughts:
- Short term rates have risen since 2011 - albeit not by much. Compared to a half-percent back in 2011, the near 1%* available in money market funds today makes them appear better in comparison than in 2011. (*near 1.5% corrected to near 1%)
- New SEC rules governing money market funds have made them safer in comparison with RPHYX than they might have appeared back in 2011.
- Both equities and high yield bonds have appreciated greatly since than. I haven’t heard a knowledgeable observer dispute for months that spreads between investment grade debt and high yield are about as narrow today as they’ve ever been.
Re #3 above - A manager in a distressed debt fund likely has been confronted with two choices since 2011: (1) reach for yield and compromise portfolio quality, or (2) settle for lower (relative) returns while maintaining portfolio quality. Some of the comments regarding “underperformance” of RPHYX suggest to me, anyway, that the fund’s managers have elected the second choice in order to preserve investor capital.
While I don’t follow RPHYX closely, I periodically compare returns against TRBUX (investment grade ultra short) which I own. RPHYX has consistently outperformed my fund (though with a higher risk profile).
Is RPHYX still a good investment? As @msf and others have noted, it all depends on your overall investment aporoach and time horizon. How much additional risk are you willing to take on in your cash / cash alternative sleeve in pursuit of incrementally higher yield on that portion of your investments? Personally, I could construct a portfolio in which RPHYX would meet a need. Presently it doesn’t fit.

While I enjoy Ms. Morgenson's columns and generally agree with them, they nevertheless tend to resemble hit pieces with the occasional questionable statement or two. Never factually wrong, but laden with innuendo.
She decries the "often hefty costs associated with TIAA funds". Yet elsewhere in the article she she states that "the average asset-weighted expense ratio on TIAA’s mutual funds was 0.32 percent in 2016", and acknowledges that this was "lower than the 0.57 percent mutual fund industry average".
She attempts some jiujitsu by arguing that this is still too high (though not calling the fees "hefty" in this section). Here's how she does that:
:
"Although lower than the 0.57 percent mutual fund industry average, it is more expensive than a low-cost provider like Vanguard, whose average expense ratio was 0.11 percent in 2016."
She gives M* as her data source. Here's what M* had to say:

The asset-weighted average fee of Vanguard’s funds fell to 0.11% from 0.14% during the past three years [2013-2016]. This 21% decline was the largest percentage decline among the largest fund providers, thanks to large flows into Vanguard’s low-priced ETFs and index funds and falling fees in some of Vanguard’s largest funds as the fund company passes improving efficiencies to fundholders. During that period, Vanguard has strengthened its leading position, as its market share rose to 22% from 18%. Vanguard’s 2016 asset-weighted average expense ratio of 0.11% was significantly below that of the second-lowest-cost provider, SPDR State Street, at 0.19%, followed by Dimensional Fund Advisors at 0.36%.

What we glean from this is that (a) you need to look at active/passive mix before chastising a family for high fees or lauding it for low ones, and (b) TIAA's 0.32% is right in line with other low cost families. Is Vanguard the only family that advisors are now allowed to use? Who are these other low cost providers that are like Vanguard?
That's not to say TIAA may not have been taken some dubious actions. Likely enough to take some of the shine off its white knight image. But ISTM not enough (or at least not enough documented) to paint it as an especially bad actor.
The one complaint she linked to seems to have merit IMHO. We have to take her word on the whistle-blower complaint though, since it is currently confidential. We don't know what else is in it, just as we didn't know the additional M* data that I gave above. (Yup, there's my own innuendo, without AFAIK misstating facts.)
To repeat, I like Ms. Morgenson's columns, I think she does a great job at digging through the underside of the financial world. But I don't take them (or any columnist piece) as gospel.

I wrote this post on RPHYX / RPHIX not too long ago: https://mutualfundobserver.com/discuss/discussion/35593/target-return-of-riverpark-short-term-high-yield-rphyx-rphix
Basically, RPHYX / RPHIX was originally billed as targeting a return of 3.5% - 4.5% a year, but the actual performance has been closer to 2.5% and declining. I still have a bit of money there but questioning whether it is worth taking risk for this level of return (and they do have risk, as 2015 showed).

For me cash is cash ... and, there are few subsitutes for it.

I agree with old skeet here. Not sure where this term 'cash alternative' came from.

Here’s a couple strict definitions for the noun cash.
- “ Cash is money in the form of bills and coins rather than checks.
... two thousand dollars in cash.”
- “Cash means the same as money, especially money which is immediately available.”
Source: https://www.collinsdictionary.com/us/dictionary/english/cash
You guys are a hard lot. Most terms in the English language are open to definition. But it sounds like both of you are pretty much in agreement with Collins Dictionary‘s narrow definition that cash means hard currency.
I might hide away a couple $50 bills when traveling, and maybe carry $150 cash in my wallet. I’d shudder to think, however, that the paper currency in my immediate possession was the only true cash I possessed.
Anytime you go beyond a U.S. minted coin or government issued paper certificate you’re introducing some degree of uncertainty. Will the bank that issued your CD remain solvent? Will the FDIC be willing and able to honor its guarantee? Will your money market fund remain solvent? Some have failed (broken the buck) in the past.
So, the question posed was Cash Alternatives. Yep - Anything beyond the actual currency (or T-Bill) entails some additional risk. I don’t think the folks responding to the thread are blind to that fact.

@bee: I'm sorry, I think M* was referring to these bonds !:
Regards,
Ted :)
https://www.google.com/search?source=hp&q=james+bond+actors&oq=James+bond&gs_l=psy-ab.1.1.0l7j0i20i264k1j0l2.2301.5837.0.16206.11.10.0.0.0.0.82.613.9.9.0....0...1.1.64.psy-ab..2.9.610.0..46j35i39k1j0i131k1j0i67k1j0i46i67k1j46i67k1j0i46k1.0.pKVZLlaBwOg

Moved some of our taxable account from SWTSX to PONDX probably will need it in the next 3-5 years, so lowering equity exposure while allowing room to run still. 30% bonds, 15% international index, rest still us index. A bit nervous having a bond fund in a taxable account. But it seemed better than the NTF nontaxable funds available to us.

For me cash is cash ... and, there are few subsitutes for it. I also consider CD's as a form of cash and pehaps some short term treasuries as well. In a low interest rate environment I have barbelled an equal amount of cash on one side and growth funds on the other. When the two are averaged my return year-to-date on the barbell is about 13%. So as a stand alone asset, not counting what my mutual funds hold in cash, my cash position is about 15% of my overall portfolio ... and, like wise my growth area is about the same. For 2017 it is estimated that capital gain distributions on the growth side of the barbell will be somewhere between four to seven percent while the cash side will yield a little better than one percent. With this, form my perspective, this makes the barbell a good income generator with an anticipated payout of somewhere between 2.5% to 4% range. And, a thirteen percent year-to-date return is not too shabby on a 50/50 mix. In addition, this return (and yield) compares favorablely to some of my better performing hybrid funds found in the income and growth & income areas of my portfolio. Year-to-date my mutual fund portfolio (as a whole) has returned about 12% according to Morningstar's Portfolio Manager.
Morningstar's Instant Xray analysis reflects overall that I am currently at about 19% cash including what my mutual funds hold.