John Waggoner: Morningstar: Advisers Are Overreacting To Fund Manager Changes Fund manager changes, especially lead managers and solo managers, should absolutely raise a red flag. There have been many instances where I can look back and say that I should have reacted to manager changes sooner. The fact that a fund is team managed should not change the importance of going back and seeing what that person's contributions were to the success of the fund during her/his tenure. Great example is IVAEX, where one of the team left in mid-2014. The fund had been struggling already that year, and it just got worse. Something was clearly not working with the fund's macro strategy, and the next year was even greater under-performance. In fact, the fund never recovered, and assets dropped from almost $13 billion to $1 billion at year-end 2016. Was the manager leaving the reason? No, but it simply was another sign that should have triggered a sale. We held until mid-2015, and fortunately were able to extract ourselves with some decent long-term gains for the most part. Should you sell every time a team manager leaves? No, but the event should mean a re-evaluation of the thesis for owning the fund and very close monitoring for a period of time thereafter.
For solo managers, and fortunately there are fewer now than in the past, this event should absolute put any additional purchases on hold until an evaluation of the new manager is completed. This is difficult for individual investors, but fortunately we have access to fund managers and can interview them.
Lesson learned over the years: funds that employ active macro and thematic strategies are very difficult to evaluate sometimes and can turn on a dime performance-wise. It's not that the managers have taken dumb pills, but rather their unusual approach can suddenly go out of favor in a big way. You really need to understand how the investment philosophy translates to day-to-day management and the many risks involved in the strategies. These funds should be kept on a short leash.
SFGIX and MAPIX Both are well-run funds that strive to limit downside risk. For conservative, total return investors, these are good options. Dow capture ratios are 65.0 for SIGIX and 45.1 for MAPIX, both really good. And both have very strong alpha numbers and relatively low betas. And there is surprisingly limited overlap of holdings. They are good alternatives to EM index funds for those who want less volatility.
GLFOX Return of Capital @BenW: I don't see any ROC !
Regards,
Ted
Dividend and Capital Gains Distributions GLFOX
Distribution
Date Distribution
NAV Long-Term
Capital Gain Short-Term
Capital Gain Return of
Capital Dividend
Income Distribution
Total
06/21/2017 17.08 0.0000 0.0000 0.0000 0.0004 0.0004
03/21/2017 1
5.28 0.0000 0.0000 0.0000 0.0210 0.0210
12/22/2016 14.22 0.0963 0.0242 0.0000 0.1
569 0.2774
09/27/2016 13.98 0.0000 0.0000 0.0000 0.0212 0.0212
08/22/2016 14.10 0.0164 0.0048 0.0000 0.0284 0.0497
A 'big fall' in markets is coming as traders put record cash to work Has anyone ever advised 'don't invest in the equity markets except with more than 5y of your living expenses'? Maybe they have and I have missed it.
Yes, it's called the bucket system.
Fund Manager #@$%*! Fired as Trump's Communications Director
A 'big fall' in markets is coming as traders put record cash to work Need? I didn't infer that from the 90/10 rule. Just that 10% in cash/short term bonds is sufficient (according to Buffett) to protect against
sequence risk.
That leaves you free to invest the rest however you see fit subject to the constraint that it will outlast you. If you've got a 30 year horizon, and 27x annual cash flow to invest (after the first three years of cash), all you need do is match inflation (after taxes) to meet that objective.
Equities should do better than that, but TIPS in a Roth would also suffice, as would a
50/
50 mix (a la Bengen).
If you've got less to invest, you can't take such a cavalier attitude toward allocation, but the 10% in cash/short term bonds still serves its role. I've been meaning to post a link to a sequence risk article - I'll start a separate thread for that.
A 'big fall' in markets is coming as traders put record cash to work
A 'big fall' in markets is coming as traders put record cash to work 5y of cashflow in cash would mean a lot of people would never be equity-invested at all, in anything. Has anyone ever advised 'don't invest in the equity markets except with more than 5y of your living expenses'? Maybe they have and I have missed it.
Even 3y would be problematic for many.
If only we all had deep pockets.
