FMIJX = OUCHX Let's look at a story of 2 International funds. If we look at total return, the growth of $10,000 invested on 1/1/2011, we have these results:
Both funds A and B start with a $10,000 investment on 1/1/2011.
on 12/31/2011, fund A had $8609 / fund B had $9823
on 12/31/2012, fund A had $10124 / fund B had $11608
on 12/31/2013, fund A had $12391 / fund B had $14969
on 12/31/2014, fund A had $11489 / fund B had $15138
on 12/31/2015, fund A had $11459 / fund B had $15625
on 12/31/2016, fund A had $11018 / fund B had $17188
on 12/31/2017, fund A had $13360 / fund B had $19843
on 12/31/2018, fund A had $11876 / fund B had $17966
on 12/31/2019, fund A had $15456 / fund B had $21034
At the end of 9 years of return history, fund B has returned 36% more than fund A.
on 4/1/2020, fund A had $12663 / fund B had $15693
Even after a misstep in the 1st qtr of 2020 (which every manager goes though) Fund B has still returned ~20% more than fund A for long term investors.
Also:
Fund A's managers have been on board for 3 years, fund B management since inception. Fund A's volatility as measured by STD is 13.5, fund A has been less volatile at 11.3.
Fund A has an expense ration of 1.15%, you'll pay less for fund B, 0.9%.
If you are a long term investor, which fund would you have been happier investing if on 1/1/2011? If you are a long term investor, why would you throw out fund B and replace it with find A? Is there a crystal ball that tells you fund A is immune to manager missteps?
of course:
Fund A = CWVGX
Fund B = FMIJX
Options for Income and Taxes Yes selling OTM puts can lead to regular income and I think they fall under friendly 1256 tax rules but I don't really remember... but if you're smart you will have them cash-secured, meaning if the market or stock symbol tanks and you're suddenly forced to buy the shares you can do it w/o going into a margin call.
HOWEVER - these days I would not be selling puts unless I wanted to own the underlying stock for a long term position, as there is the great likelihood that things will go south again quickly and blow out my short put positions. If volatility makes *very*very* OTM puts attractive I'd consider them for a trade, but unless you're looking to either trade them or accumulate stock, selling puts is NOT recommended during periods of market volatility even if the volatility makes puts 'attractive' because of the increased IV.
Conversely you could write covered calls on ETFs or stocks you own - such as quality dividend stocks. That way you can collect *something* more than MM rates, and you have some downside protection to exit your position before losses kick in. If the stock goes up, whoop-de-doo, you make a profit.
Index futures options (/ES) or index options (OEX, SPX) also have trading nuances such as wide bid-ask spreads, goofy settlement schedules, and depending on the vehicle, limited liquidity.
Vanguard Treasury Money Market Fund is closed to new investors @msf - I started another thread on using options to generate income instead. Marcus and Amex Personal Savings are FDIC insured and yielding around 1.
5%. Vanguard Prime is yielding around 0.6, Treasury MM little lower. There was as a Time Prime was yielding more than the FDIC insured accounts which is why I had parked my cash there - cash I need to pay college tuitions.
Right now, I'm thinking of moving it to one of the above two FDIC insured Bank MMs. Unless I hear what I want to hear in my other thread and want to try and eke out a bit more return with as low a risk as possible.
Options for Income and Taxes So Vanguard Prime Money Market is yielding 0.6. All other "Safer" money markets are yielding even less. This when just a couple of months back Prime was yielding more than what you could get in an FDIC insured MM account with a bank. While Bank MMs have also dropped their interest rates, Mutual MM fund yields have basically collapsed.
All of the above to simply explain I'm looking at selling OTM Puts to generate Income and wanted to know tax treatment. I learnt gains / losses from options are capital gains, all short term unless options are actually held over a year (and even here there are some exceptions). More curious was the fact index/bond/futures options get a more favorable treatment of 60/40 long term/short term tax rates. So now I have one question for those might be doing what I'm about to try, or otherwise use options regularly in their portfolios.
If I sell options on SPY - ETF that invests in the S&P 500 index - will I qualify for the favorable 60/40 tax treatment? I'm thinking not and only institutions that can actually sell options directly on the index may be able to do that. However, thought I would ask.
Stocks Soar After Fed Announce Open Ended QE @FD1000 ... What is your source for the VIX?
FD1000 says, my reporting is wrong and ... "In the last 2 days, the VIX is around 40"
My source is linked below. I stand by my statement and it can be postured by visiting the link below. Just hover over the VIX in the matrix and you can see that for the past couple of days the VIX has been back of the 40's and in the mid 30's. Click in it and it becomes more revealing.
https://finviz.com/futures.ashxThis now makes count two, from my perspective, that you have engaged me and I have withstood the challenge coming from you, FD1000, not once but now twice.
This person certaintly seems to enjoy striffe not only with me but others as well. Howerver, on the bright side of things, their challenges, now twice failed, have given even more credence to my postings.
(
link) to VIX numbers
April 1
5-16 VIX > 40
another (
source)
Another (
source)
==========
BTW, I can't remember the second challenge, please remind me :-)
FMIJX = OUCHX Several comments
1) FMIJX ranks in M* in its category for YTD and 1-3 years at 92-94 which is at the bottom 6-8%. In the last
5 years it ranked in the top 10% in 3 years but at the bottom 2 years. That should tell you its inconsistency. Up to 2016 it was a much better performer.
2) From their 3/31/2020 outlook "At this early stage, COVID-19 has hurt
value investors much more than their growth counterparts. Many sectors and industries in the value camp, such as financials, energy, industrials, travel and hospitality, have been the hardest hit by the virus. Intensifying the market pressure, Saudi Arabia’s unexpected move to open the spigots has crushed the price of oil. Nearly all energy-related companies, including businesses that only have moderate energy exposure, have seen their stocks decline precipitously. Year-to-date, value has underperformed growth by 10.69%, as the MSCI EAFE Value Index has declined 8.20%,"
3) You can switch to CWVGX with better performance + risk. See PV(
link)
4) I have been avoiding international for years now. The SP
500 gets about 40% of its earnings from abroad and QQQ about
50%.
Stocks Soar After Fed Announce Open Ended QE Hi
@VintageFreak, I share your concerns. With the low yields on cash ... and, the thought that equities will run low on gas ... I hope to be at my target allocation of 10% cash, 4
5% income and 4
5% equity come the first part of summer. Within equities I'm about half in the good dividend paying value type funds with the other half being in growth.
