Howdy,
Again, a thank you to all who post the links and also start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep; if and when it returns. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... The equity dump truck has its motor running and we just about pulled the lever to dump the whole related batch last week. As the market blipped up a few days, we did sell CAMAX, FSAVX; as well as DHOAX, in the bond sector. DHOAX in particular, for a technical aspect; indicated a Relative Strength that would indicate a buy for some folks. The encounter with this is what is fair value or undervalued. While I don't have any writes to direct to this area from 2008; one must suspect that there were enough "professionals" in the investment world who continued to find stuff "undervalued" per their guage. Some of these folks likely continued to be surprised for the next 6 months from Oct. 2008, as to what undervalued might really become. We all have our own guage to measure what we feel may be undervalued today; versus the unknown forward paths, and how the investments fit into our risk/reward scenario.
Most of Europe and the U.S. still find problematic conditions that remain paralyzed by both legal (Europe) and political circumstances. I can not begin to fully understand the most complex nature of the required interactions needed among the European nations that would offer a more positive prospect of corrective actions. The U.S.; well I sure don't find much comfort with the actions in D.C.; and sadly, there are some very decent folks there who work very hard and become road kill to the movers and shakers.
I can only offer this video link; in regard to the machinations of those in Europe and the U.S. who fiddle while the fires burn. I believe I had previously posted at FundAlarm.
VAN HALEN lyric:
Don't wanna wait 'til tomorrow
Why put it off another day?
One by one, little problems
Build up, and stand in our way. Oh
One step ahead, one step behind it
Now ya gotta run to get even
Make future plans I'll dream about yesterday, hey!
Come on turn, turn this thing around
(Right now) Hey! It's your tomorrow
(Right now) Come on, it's everything
(Right now) Catch your magic moment
Do it right here and now
It means everything
Miss a beat, you lose a rhythm
An nothin' falls into place. No!
Only missed by a fraction
Slipped a little off your pace. Oh!
The more things you get, the more you want
Just trade in one for another
Workin' so hard to make it easy
Whoa, got to turn. Come on, turn this thing around
(Right now) Hey, it's your tomorrow
(Right now) Come on, it's everything
(Right now) catch that magic moment
Do it right here and now
It means everything
Said a lie to me
Right now
What are ya waitin' for? Oh! Yeah!
Right now
(Right now) Hey! It's your tomorrow
(Right now) Come on, it's everything
(Right now) Catch that magic moment
And do it right, right now (Right now)
Oh, right now!
It's what's happening
Right here and now
Right now, it's right now
Oh!
Tell me, what are ya waitin' for?
Turn this thing around Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh?
Hey, I probably forgot something; and hopefully the words make some sense.
Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
SELLs/BUYs THIS PAST WEEK:
Sold entire postion in CAMAX, FSAVX and DHOAX, with all procedes going to FBNDX. We took it in the teeth with the first two......oh, well; tis how the cookie crumbles sometimes.
Portfolio Thoughts:Our holdings had a -.34 % move this past week. And yes, we are satisfied with our risk adjusted returns YTD. If the portfolio can pull a +10 to 12% for the year; you will not hear any whining from this house. (This sentence was from an April write; and I/we suppose a +5% for the year may now look good, too !) Our portfolio is at - 5 % from the high point in mid-July.
OMG. was the first word cluster from the mouth at this house when discovering the portfolio was still positive for YTD.
DON'T like the recent action in the HY bond sector, not moving up much with the few equity blips. I take this as a traders market in equities with some "run and gun".....take some profits and run. Our sells this past week of the above indicated and moving to an IG bond fund tells you just about all you need to know about our feelings as to forward directions. More head scratching next week; without a doubt. We'll still maintain that if the kids in Europe get a real plan of value that is is accepted and not just show and tell; our portfolio will get a big kick down and those of you holding equity positions will smile. I/we here just don't feel the "love" of a plan of purpose headed down the path, anytime soon. So, we too; are in the darn if you, darn if you don't camp. And for the time being, we are stuck with PTTRX as the only bond fund in one particular account. At least its value is not yet negative. LSBDX may get a rework/trim job; as it is not happy in this current environment either.
The old Funds Boat may make 5% or 25% this year. I expect some rough waters, changing winds and opposing currents; causing the most serious attention being given to a firm hand upon the rudder control.
(April report text) The immediate below % of holdings are only determined by a "fund" name, NO M* profile this week
CASH = 8.3%
Mixed bond funds = 83.6%
Equity funds = 8.1%
-Investment grade bond funds 23%
-Diversified bond funds 18.5%
-HY/HI bond funds 23.2%
-Total bond funds 14.6%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
Comments
I continue to ride the equity train within my portfolio. I am currently 62% equity, 25% income and the rest in cash (13%). For the most part, I closed out the other asset section of my portfolio, booking profit, and have included the residual part within the equity section since it is now less than 2% of the overall portfolio. Year-to-date I am down 3.2% while my benchmark the Lipper Balanced Index is down 4.4%. From my thoughts equities in general are currently better than 20% undervalued as I write. This is supported by Morningstar and their valration graph which David recently wrote about in his October blurb. And, in answer to David's question ... Are you buying? Yes I have been buying equities since July and have raised my equity allocation from the low 50's range to the low 60's range. In addition, my portfolio favors me better than a 5% yield so I am getting paid while I await better days for equities. I plan to retire within the next 18 months, or so, and, with this, I have elected to maintain my cash at its present level and not go heavier into equities. From a rolling year perspective my dividend income has increased by about 20% from where it was last year. And, with this, as my CD Ladder had matuities resulting in a loss of interest income ... my strategy worked ... as the dividend increases covered the loss of interst income.
Have a great week and thanks for your continued post. I enjoy reading your take.
Skeeter
A thank you to you for your continued input for all of us to consider in "making" our portfolios. You, indeed; may be on the big winning side going forward. As I noted, our portfolio mix indicates a more muted vision of equity strength going forward. Considering your percentage of equity holdings, I am surprised that your portfolio is only down the amount you reported.
In spite of the still very high unemployment figures and likely true unemployment at double the Labor Dept statistics; money is still being spent by a majority of citizens. The question continues to be: spending on what and where???
Our holding of FDLSX reflects some of this thinking with holdings of food/restaurants, gaming and related.
Although seasonal in Michigan; one is tempted to be a good picker at yard sales and re-do the buys with one's own yard sale.
Okay, I got to get my butt in gear, taking advantage of the grand weather we are having to get "before the snow flies" projects wrapped up.
Take care of you and yours,
Mark
Have a good week and I indeed wish you the very best.
Skeeter
Enjoy your posties, Mindy.
http://www.makingthishome.com/2009/07/28/how-to-sound-smart-motors-vs-engines-edition/
Anyway, I know at the 1st qtr, you were starting an imaginary portfolio of funds. Did you check how it performed recently?
===
Addition: I am also curious why you continue to hold the Fidelity Large Cap Value fund which you purchased by mistake. I don't think it is a great fund either. Why not reallocate that fund into another fund?
I'll do the old FA method for replies:
"SELLs/BUYs THIS PAST WEEK:
Sold entire postion in CAMAX, FSAVX and DHOAX, with all procedes going to FBNDX. We took it in the teeth with the first two......oh, well; tis how the cookie crumbles sometimes.
It looks like you bought CAMAX close to the top and and after you sold, stock funds has actually rallied significantly this week. Buy high sell low huh?
>>>>>As to CAMAX, bought high, relative to our sale price; but it remains to be seen if the sale price is the low. As to significant gains in the past week; it appears the fund was outperforming in up markets; but is having a hell of a time getting it right in a sideways market. The fund is acting like a long/short fund and having problems with the proper direction. So, gone it is. FSAVX.....really thought there would be more going forward, although not at the 2009 pace; so, gone, too. DHOAX...we had held this since May, 2009; but the fund was not holding up as well as the other HY funds....so, gone, too. All of this was and is still part of a "dump" waiting to be made.
Anyway, I know at the 1st qtr, you were starting an imaginary portfolio of funds. Did you check how it performed recently?
>>>>>The Grand Illusion fund. The portfolio mix is in place and the list is parked somewhere on this pc. I have not had time this summer to even look at the results so far. I will attempt to find this and place the list at MFO. Where we live in Michigan finds only about 2 more weeks of possible decent outside weather; to attempt to finish any outside projects. As we own and maintain our home (ah, the joys of home ownership
Addition: I am also curious why you continue to hold the Fidelity Large Cap Value fund which you purchased by mistake. I don't think it is a great fund either. Why not reallocate that fund into another fund?"
>>>>>This fund has had some very nice up days when the equity markets think they are happy. It isn't doing as poorly as many equity funds. What would you buy with the sale of this fund; knowing the overall moderately conservative mix we now have ?
Summary: The last two years has found us being Euro-ized two times. In May of 2010 and 2011. I was much too optimistic with the willingness and ability of the EuroZone leaders to come to grips with their problems. Our equity holdings have suffered from this and downsized the returns we have been slowly gathering in the bond sector. We were also expecting continued value in the Treasury bond area; but that sector has far surpassed our wildest thoughts about this.
Doing the silly rearview look at our portfolio: We would not have purchased many eqiuity funds in May, 2010 or 2011. We missed the equity move from the Sept. 2010 period. And we sure would have purchased a boat load of Treasury related funds in July of this year; had we known this area would exceed our optimistic view.
Either the bond market or equity market area is wrong at this time; looking forward to the next 6-12 months. This is an easy statement to make; but not easy to "call" looking forward.
As there are very few here (MFO) who have noted their holdings; I sure don't know how we measure against a similar portfolio, with the exception of Skeeter who notes his moves, but I don't know the holdings.
Our main goal; as is indicated, is to preserve capital, as we are not far away from no cash flow from "work". We will not have any grand pension or health care plan into retirement; as is common for many in this state related to the large boomer population retired from the unionized auto industry and the related large group of retired from what was a very large group of folks in the gov't/teaching/public sector; all of whom have very nice retirement packages. Without a post retirement health care plan provided and pre-Medicare retirement; a family plan here for health/dental currently has quotes of about $20,000/year with fairly high deductibles. We have always been aware of all of this with our chosen careers and have planned accordingly with building our own pension fund via IRA's, 401k's and related. We skipped all of the toys one used to find among the families in our area....the boats, snowmobiles, jet skis, the second home or cottage at the lake, etc. When we wanted or needed these adventures............we rented. We are debt free, with the exception of the normal recurring expenses.....property taxes, utilities, home/auto insurance, food and gas, etc.
So, there it is in a nutshell. We don't knowningly have a rich aunt, uncle or similar flowing inheritance money our way in the future, the self provided health care plan is going to cost an additional 9%/year at the current rate changes and we have our fingers crossed that we don't outlive our money.
While still seeking perfection in the invesment world, we will continue to make mistakes from not having time for the best research and will also be whipsawed by the perverted markets. Other than all of this, life is good.
I stepped through this reply fairly fast; and hopefully there are not many typos or mismatched thoughts; as I did not proofread the text.
Bonds sector or equity sector going forward for the next 6-12 months ??? What say you ?
Be well in Austin,
Catch
That said, I was a little surprised, given the retirement/near retirement age of many of the posters here that CAMAX had become more popular; that fund is aggressive and consistently aggressive - in addition, it can also use leverage. It does short, but not to great effect - it's a fund that will do well during good times and being at the bottom of the pack would not be surprising during bad times.
I'd much rather suggest Marketfield (MFLDX), which is a very flexible long/short fund that has had a history of success at knowing when to dial up/down risk - it lost 12% in 2008 and was up 31% in 2009 and 14% in 2010. Past returns are no guarantee of future results, but this fund is - in my opinion - really one of the few successful long-short funds that has pulled off the strategy consistently.
"That said, I was a little surprised, given the retirement/near retirement age of many of the posters here that CAMAX had become more popular; that fund is aggressive and consistently aggressive - in addition, it can also use leverage. It does short, but not to great effect - it's a fund that will do well during good times and being at the bottom of the pack would not be surprising during bad times."
Yes, to the above. CAMAX was part of a barbell shape, offsetting the sleepy and slow moving bond funds we hold.
Tis why it was kicked out of the house, as you note above and what we saw. I have not and likely will not be a fan of long/short funds. I don't know that these folks have the edge in the current market environment. Had a discussion about BPLEX with Fundmentals when he was still around at FA.
Perhaps the long/short funds will get things right going forward; but I don't have faith in this practice, and if they do get things very right, I/we here will have missed that boat.
Thank you for your thoughts,
Catch
Hi Catch. Just my opinion, but your question on bonds or equities (?), I wouldn't make it an either or. You need to be conservative as you say, but I believe some equity funds are worth holding in what ever percentage you feel comfortible with.
What would I replace your Fidelity Value fund with? I think that's an easy one... my favorite funds have managers with capital preservation at the forefront and have a good history in bad markets would be either of the Yacktman funds, YAFFX is what I hold or the Parnassus Equity Income fund PRBLX. For small caps, the new ARIVX has been a standout. YAFFX and ARIVX are the only pure equity funds I'm holding on to right now. And they are "comfortable".
Just my 2cents. Good luck.
I was going to chastise Catch on that myself yesterday, but decided to give him a break.
Ah, the beauty of the English language; as long as the discussion is among those who are fairly knowledgeable in the idioms and semantics, too. As you two have well proven.
http://science.howstuffworks.com/transport/engines-equipment/diesel-locomotive.htm
When I was a young snot of a lad and had a keen interest in fast autos and well, the ladies, too; some automotive terms were interchanged, although not totally accurate; but understood by those involved in the discussion.
Motor and engine found swapping methods for naming. Another common name swap related to forcing the engine/motor to obtain maximum output..........."floor it, pedal to the metal, mash it, nail it, stomp it".....and the list is longer.
* A motor converts electricity or other forms of kinetic energy into a mechanical motion *
* An engine is a mechanical device that uses a fuel source to create an output
I well state for the record; that if either one of you were the only passenger, in the front seat of one car in my past possession and I drove the car gently down the onramp to what I knew would be a few miles of absolute smooth concrete interstate highway; and as the ramp turned to merge with the straightaway interstate, and as the engine/motor rpms increased and then full throttle was applied until the engine/motor obtained 6,000 rpms at the first gear shift point, and the same rpm limit was put in place for the remaining 3 gears of the fully schronized, close-ratio four speed transmission; that when 6,000 revolutions of the engine/motor was established in 4th gear, after about 47 beats of your human blood pumping muscle......that you would likely be fully excited; as your body remained pushed back into your seat....a kinetic kinda thing, eh?
Thank you both for keeping my grammar check in place.
Take care of yourselves,
Catch
Ah, the beauty of the English language; as long as the discussion is among those who are fairly knowledgeable in the idioms and semantics, too. As you two have well proven.
http://science.howstuffworks.com/transport/engines-equipment/diesel-locomotive.htm
When I was a young snot of a lad and had a keen interest in fast autos and well, the ladies, too; some automotive terms were interchanged, although not totally accurate; but understood by those involved in the discussion.
Motor and engine found swapping methods for naming. Another common name swap related to forcing the engine/motor to obtain maximum output..........."floor it, pedal to the metal, mash it, nail it, stomp it".....and the list is longer.
* A motor converts electricity or other forms of kinetic energy into a mechanical motion *
* An engine is a mechanical device that uses a fuel source to create an output
I well state for the record; that if either one of you were the only passenger, in the front seat of one car in my past possession and I drove the car gently down the onramp to what I knew would be a few miles of absolute smooth concrete interstate highway; and as the ramp turned to merge with the straightaway interstate, and as the engine/motor rpms increased and then full throttle was applied until the engine/motor obtained 6,000 rpms at the first gear shift point, and the same rpm limit was put in place for the remaining 3 gears of the fully schronized, close-ratio four speed transmission; that when 6,000 revolutions of the engine/motor was established in 4th gear, after about 47 beats of your human blood pumping muscle......that you would likely be fully excited; as your body remained pushed back into your seat....a kinetic kinda thing, eh?
Thank you both for keeping my grammar check in place.
Take care of yourselves,
Catch
Hey Catch, I would consider YAFFX as a replacement for FSLVX. I would say YACKX but that is no longer NTF at Fidelity. Nevertheless, both Yacktman funds are very similar.
Alternatively, you can invest in a couple of good balanced funds and have the manager manage the bond/equity allocation for you. That way, you are less likely to be jumping in and out at wrong times. A few to consider: GLRBX, OAKBX, PRPFX, FPACX
Regarding allergies: I am sorry for you. Before I moved to Austin, I did not know much about allergies. I think within 5 years most people develop some allergies here. Some people claim Austin is the allergy capital of the world. I don't know if it is true. (Austinites also believe and advertise as Austin the Live Music Capital of the World)
Being Generation X, there are no pensions for me either. No cushy health benefits attached to a pension either. With the Republicans out there to destroy Medicare and Social Security as we know it, I think retirement will be much more difficult for me. I am not sure, if I will be able to build a big enough fund by then. I am not expecting a big inheritance to bail me out either. I still have 2 kids to send to college and college costs like health care is increasing much higher rate than inflation.
Bonds or equities? I wish, I knew. If I knew, I would buy long treasuries this summer. I am pretty heavy into equities but have a long time horizon.. Despite that I'm down ~5% YTD after recent rally. I try to get myself to buy a small amount on equities large down days. I think in the next 12 months market will be higher than now.
I do think Investor's suggestion of balanced funds is good, although I particularly like FPA Crescent out of the bunch. Permanent Portfolio is a fine choice as well and one I'd actually recommend after the recent downturn in metals, which make up a large % of the fund.
I also continue to recommend alternatives, such as Managed Futures, which are not heavily correlated to the markets and may provide a buffer during rougher periods.