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Cramer on cnbc today: "The Europeans have blown it .... the Europeans are going to bring down the world economy." Now, do you buy on fear or sell before it's too late? Or, just turn off cnbc?
hi hank just turn it off probably -4% to +5% return in 2012...very slow growth over the next few yrs I suspect. Unless we all run out of money and then all hell break loose...maybe double dip.
it's too early to tell but I suspect it would be slow steady growth, and we won't see return in the growth in Econ china 9s%-12% in EM as we've seen the past 20-30 yrs
A fair amount of the world is problematic to say the least, but Europe makes for an easy place to point fingers towards. I'd remain flexible and invest in a way that can handle continued (and possibly substantial) volatility. In other words, circle the wagons and settle in for what may continue to be a volatile period, but I would not head for the hills entirely - just get to a point where you're comfortable if things continue like this or get worse.
I still remain a believer in longer-term themes, but I recommend anyone who believes in EM (for example) to prepare with the mindset that that is a longer-term theme, and decoupling isn't happening if things turn significantly South short-term.
Additionally, in terms of CNBC, I wouldn't take anything that Cramer (or especially Steve Leisman, who is as annoying as former CNBC anchor Dennis Kneale) says seriously.
Reply to @PopTart: I continue to like EM and hard assets (and there's a lot that can go under the second umbrella.) However, I'm definitely aware that if there's another 2008-style scenario, these aren't immune by any means and thus are really viewed with a much longer time horizon. Right now, I have some hard asset plays, some EM plays, some broader market investments and quite a bit in the way of alternative investments (and as for alternatives, I am a big fan of alternatives, but will readily admit that what's available is very hit-and-miss.)
I do think the next few years will be anything but easy, and you have to really pick your spots. I'm definitely not saying run for the hills, but get to the point where you're going to be comfortable (and then get more comfortable than that) or take a very long-term time horizon with specific investments.
I continue to like alternative investments (managed futures, etc.) in an attempt to reduce volatility. As for the long-term viewpoint, I think you're living in a world that's increasingly short-term in its thinking and those who have long-term viewpoints on anything specific (maybe not EM, but healthcare, perhaps or whatever) have to be willing to devote a reasonable portion of their portfolio to that and then stick with it.
Additionally, as I noted the other day, I don't think there are any safe havens, but I also think that more incidents beyond the recent MF Global situation will continue to show that little is sacred in the financial world and that more "commonly accepted" concepts/principles will be turned on their head.
I don't think the European situation is over, but under the cover of that, we're also not fixing any of this country's fiscal problems, either. You're going to see more retail investors (whether large or small, and plenty of larger investors yanked their money from hedge funds this year) leave the market (those close to retiring taking money out of "risk", etc) or continue their flight into the belief that bonds are 'safer harbor.'
The world isn't ending anytime soon, but people have to be ready (whether it be taking a very long time horizon or lowering volatility/risk) for what I think will be a very rocky next few years, if not longer.
question for Scott, What could be mutual fund advice for an 78 yr older person when a long term outlook is advised?. money is in an self directed roth ira and a 5% return would be excellent good health zero debt and about 100k to invest? thank you regards circa33
circa33 good evening, Scott Thank you for your time and your suggestions. I will make changes to Our < wife& me > investments after Jan. 1 2012. We have 10 funds now Your list will give me a lot of DD to do. again thank you for your time on our behalf. regards circa33
For Circa33: For lower volatility, you might also look at BERIX, and for high dividend, see DLTNX and PREMX. And DODIX: solid, conservative, quarterly pay-outs. (BERIX holds both stocks and bonds.) I'm not holding much more than $100K right now, myself, and I'm heavily in MAPIX and PREMX. Also PFE and MACSX.
That's a really interesting portfolio, Scott. Cautious and quite hedged.
I'm surprised, though, at your recommended high allocation to fixed income. From the Grantham thread, I had thought that you were very negative on bonds and that you felt that gold and other hard assets had to be a significant part of one's portfolio.
Just wondering: Would your portfolio's composition look very different for someone at ages 38 or 58?
[BTW, Did you see that I had responded to your questions and comments in the Grantham thread?]
Reply to @Ginko: Reply to @Ginko: I'm younger - probably by a significant degree - than just about everyone on the board (and probably everyone on the board). At my age, I can have my own rather unique portfolio that reflects my own outlook/worldview and takes the particular risks that I want to take and is generally lower-than-average risk elsewhere.
However, what I recommend for me is not what I would recommend for someone at 78 - additionally, as you asked, what I would recommend for someone at 38 would look different (although I would still likely recommend less risk than what most would think appropriate for a 38-year-old and would use some of the same funds) than what I would recommend for someone at 78.
*I* can be middling-to-negative on a good deal of fixed income right now and make the choice/bet of being underweight fixed income for the short-to-mid-term. Fixed income is not what I want to devote money to right now. That's not to say that I won't be positive on one or more fixed income sectors down the road. A few years ago, I was extremely positive on EM bonds, and people said things like "How could you trust those governments?" In the last year or two, EM bonds became a hot sector, you saw all these new EM bond funds, etc. I sold too early, but am still not interested in going back into it - yet.
However, the investment reality (time horizon/risk tolerance/needs/etc) of someone in their '70's is admittedly different and that has to be respected and taken into account. I'm not going to tell someone in their '70's to buy a volatile natural resources stock or put a large amount of their money into a commodities fund. If I'm going to recommend anything to someone in their '70's, lower volatility is going to be a high/higher priority.
This is why you'll never see me recommend my portfolio (although I discuss aspects of it) for those on the board, who tend to be older/quite a bit older (no offense to anyone.) The portfolios I recommend (such as the one above) tend to take some degree of my views (such as being positive on the inclusion of alternatives - Marketfield and Arbitrage Event-Driven; I recommended a larger degree of EM bonds in my portfolio recommendations a while ago, then my views on it changed, so you're not going to see specific recommendations for TGINX as I used to, etc.) and a larger degree of more age-appropriate suggestions.
For someone in their '50's, I'd consider Pimco Commodity RR instead of Permanent Portfolio. MLPs (in terms of hard assets and also providing additional income) would be something I'd consider recommending for someone younger, such as the Salient MLP (ticker: SMF) closed-end fund (which is unique in the MLP space with its ability to hedge in multiple ways), or one of the Steelpath funds. There's some very interesting single MLPs, but I'd rather recommend a fund if I was going to recommend MLPs. For someone in their 30's/40's, MLPs, commodities or other hard assets would be a bigger portion of the recommended portfolios, but to a more moderate degree than the bets I've made - as for me it's more of a primary bet/longer-term theme. For someone in their '70's, Permanent Portfolio would be a suggestion, and while I'd have to do more research, some of the newer "Real Asset" balanced funds may be an option.
Additionally, given my viewpoint that the volatility seen in the market currently could go on for quite a while and get worse, I think it's increasingly important - If I'm going to recommend something, especially to an older individual - to try and pull together something that is a little smoother and more "slow and steady" to try and keep the comfort level up and not have people get frustrated from shorter-term volatility (which happens to everyone at times.) That's difficult and an imperfect science, certainly, but I think that at least leans towards recommendations that - like those above - may bring in some personal views and/or style, but lean (how much depending on age) towards more the more low-key.
Hi there Scott- well done, sir. Wisdom beyond your age. Most of us have to learn this stuff the hard way, by trial and error- more error than not. You have been gifted with the ability to see that the needs and perspectives of other people may not necessarily be the same as yours. The ability to put yourself in someone else's position is to be valued, and unfortunately is almost totally absent in the clowns running Washington and Wall Street. But then, nothing new there, either. Just a little worse than average right now.
Reply to @Old_Joe: Thank you for the kind words, they're much appreciated.
My style of investing is certainly nontraditional, but I don't believe there's one path to investing, either. A lot of being nontraditional, I find, results in learning experiences and trial-and-error, including things like investing in foreign market funds and taking larger-than-average bets on themes like emerging markets or hard assets. For me, investing becomes - for better or worse - a lot of my worldviews, interests and particular, almost abstract-ish/outside the box style. Sometimes it works wonders, sometimes it doesn't, but it's always interesting and I think - at my age - trying to veer from the traditional has lead to a great deal more in the way of learning experiences.
I don't think that anyone nearing retirement age should do what I'm doing, and while I've shared parts and pieces, I think those who find what I'm doing interesting and want to invest in some of the things that I'm in are welcome to do so, although that's their decision and only after they've done their research.
It's difficult, because I can make blanket statements about my views, but they aren't going to be right for everyone nor would I recommend them to everyone, but I think it's difficult to break down what audience I'm recommending something to with each statement.
That said, if someone specifically says, what would you recommend off the top for someone who's 78, I'm definitely going to recommend something I think is appropriate, more traditional and yet, can still incorporate elements of my particular style or view. I can like hard assets and commodities, but I really think the realities and the priorities for an older person are different, and a priority - I think - is being able to sleep at night and far more preservation and I think (especially over the next decade) an increasing priority on (relative) stability.
Being "un-traditional" in approach is not necessarily better or worse, but I'm also well aware that most people understandably don't want to devote the time or enjoy the research. I like research, but know I could never have the patience or desire to try to pull off the timing/chart strategies that some people on this board have managed to do well with.
I don't have a high risk tolerance, either, and as I noted above, if I were to recommend a portfolio to a 38-year-old, it would still likely come in at a lower level of risk than some would think appropriate and that comes from a place of believing that the recent volatility could continue or get worse for a long while, and rather than trying to swing for the fences, trying to swing for consistent singles/doubles and maybe luck into a few triples will be a better approach for the average person.
I suppose one could say that some of the larger bets that I'm making are attempts to see over the horizon and pick my spots for what *I* personally believe will be longer term home runs and while some may not agree with my reasoning (and I don't expect them to), these choices - like everything else - comes after a great deal of thought and reasoning. I'd say most of the rest of my investments are attempts at singles (a lot of the alternative investments) or doubles. There will be some strikes.
My method of investing is definitely abstract and takes the risks that I think are desirable for the next 5-10 years, but much of the remainder is decidedly lower/low-key.
Thanks for your explanations of your strategies, particularly how you would apply them for younger clients.
I was particularly interested by your inclusion of the absolute return-type funds (Marketfield, AQR Risk, Arbitrage Event) in the portfolio. You're certainly not in the mainstream in your overall strategy, and so it's very helpful to see these specific fund picks.
MaxBialystock, Thank you for your input on our behalf. I will include the mutual funds and the etf PFE in my homework to do before 1-1-2012. regards circa33
Comments
just turn it off
probably -4% to +5% return in 2012...very slow growth over the next few yrs I suspect. Unless we all run out of money and then all hell break loose...maybe double dip.
it's too early to tell but I suspect it would be slow steady growth, and we won't see return in the growth in Econ china 9s%-12% in EM as we've seen the past 20-30 yrs
I still remain a believer in longer-term themes, but I recommend anyone who believes in EM (for example) to prepare with the mindset that that is a longer-term theme, and decoupling isn't happening if things turn significantly South short-term.
Additionally, in terms of CNBC, I wouldn't take anything that Cramer (or especially Steve Leisman, who is as annoying as former CNBC anchor Dennis Kneale) says seriously.
I do think the next few years will be anything but easy, and you have to really pick your spots. I'm definitely not saying run for the hills, but get to the point where you're going to be comfortable (and then get more comfortable than that) or take a very long-term time horizon with specific investments.
I continue to like alternative investments (managed futures, etc.) in an attempt to reduce volatility. As for the long-term viewpoint, I think you're living in a world that's increasingly short-term in its thinking and those who have long-term viewpoints on anything specific (maybe not EM, but healthcare, perhaps or whatever) have to be willing to devote a reasonable portion of their portfolio to that and then stick with it.
Additionally, as I noted the other day, I don't think there are any safe havens, but I also think that more incidents beyond the recent MF Global situation will continue to show that little is sacred in the financial world and that more "commonly accepted" concepts/principles will be turned on their head.
I don't think the European situation is over, but under the cover of that, we're also not fixing any of this country's fiscal problems, either. You're going to see more retail investors (whether large or small, and plenty of larger investors yanked their money from hedge funds this year) leave the market (those close to retiring taking money out of "risk", etc) or continue their flight into the belief that bonds are 'safer harbor.'
The world isn't ending anytime soon, but people have to be ready (whether it be taking a very long time horizon or lowering volatility/risk) for what I think will be a very rocky next few years, if not longer.
What could be mutual fund advice for an 78 yr older
person when a long term outlook is advised?. money
is in an self directed roth ira and a 5% return would be excellent
good health zero debt and about 100k to invest?
thank you
regards circa33
40% fixed income (Templeton Global Bond, Pimco Total Return, Doubleline TR and others, etc.)
5% Marketfield (MFLDX)
5% Arbitrage Event Driven (AEDNX)
10% AQR Risk Parity (AQRNX)
10% Yacktman (YACKX)
10% First Eagle Overseas (FESOX or other share class)
10% Pimco All Authority (PAUDX)
5% Permanent Portfolio (PRPFX)
5% Sierra Core Retirement (SIRIX)
good evening, Scott
Thank you for your time and your suggestions. I will
make changes to Our < wife& me > investments after
Jan. 1 2012. We have 10 funds now
Your list will give me a lot of DD to do. again thank you
for your time on our behalf.
regards
circa33
That's a really interesting portfolio, Scott. Cautious and quite hedged.
I'm surprised, though, at your recommended high allocation to fixed income. From the Grantham thread, I had thought that you were very negative on bonds and that you felt that gold and other hard assets had to be a significant part of one's portfolio.
Just wondering: Would your portfolio's composition look very different for someone at ages 38 or 58?
[BTW, Did you see that I had responded to your questions and comments in the Grantham thread?]
However, what I recommend for me is not what I would recommend for someone at 78 - additionally, as you asked, what I would recommend for someone at 38 would look different (although I would still likely recommend less risk than what most would think appropriate for a 38-year-old and would use some of the same funds) than what I would recommend for someone at 78.
*I* can be middling-to-negative on a good deal of fixed income right now and make the choice/bet of being underweight fixed income for the short-to-mid-term. Fixed income is not what I want to devote money to right now. That's not to say that I won't be positive on one or more fixed income sectors down the road. A few years ago, I was extremely positive on EM bonds, and people said things like "How could you trust those governments?" In the last year or two, EM bonds became a hot sector, you saw all these new EM bond funds, etc. I sold too early, but am still not interested in going back into it - yet.
However, the investment reality (time horizon/risk tolerance/needs/etc) of someone in their '70's is admittedly different and that has to be respected and taken into account. I'm not going to tell someone in their '70's to buy a volatile natural resources stock or put a large amount of their money into a commodities fund. If I'm going to recommend anything to someone in their '70's, lower volatility is going to be a high/higher priority.
This is why you'll never see me recommend my portfolio (although I discuss aspects of it) for those on the board, who tend to be older/quite a bit older (no offense to anyone.) The portfolios I recommend (such as the one above) tend to take some degree of my views (such as being positive on the inclusion of alternatives - Marketfield and Arbitrage Event-Driven; I recommended a larger degree of EM bonds in my portfolio recommendations a while ago, then my views on it changed, so you're not going to see specific recommendations for TGINX as I used to, etc.) and a larger degree of more age-appropriate suggestions.
For someone in their '50's, I'd consider Pimco Commodity RR instead of Permanent Portfolio. MLPs (in terms of hard assets and also providing additional income) would be something I'd consider recommending for someone younger, such as the Salient MLP (ticker: SMF) closed-end fund (which is unique in the MLP space with its ability to hedge in multiple ways), or one of the Steelpath funds. There's some very interesting single MLPs, but I'd rather recommend a fund if I was going to recommend MLPs. For someone in their 30's/40's, MLPs, commodities or other hard assets would be a bigger portion of the recommended portfolios, but to a more moderate degree than the bets I've made - as for me it's more of a primary bet/longer-term theme. For someone in their '70's, Permanent Portfolio would be a suggestion, and while I'd have to do more research, some of the newer "Real Asset" balanced funds may be an option.
Additionally, given my viewpoint that the volatility seen in the market currently could go on for quite a while and get worse, I think it's increasingly important - If I'm going to recommend something, especially to an older individual - to try and pull together something that is a little smoother and more "slow and steady" to try and keep the comfort level up and not have people get frustrated from shorter-term volatility (which happens to everyone at times.) That's difficult and an imperfect science, certainly, but I think that at least leans towards recommendations that - like those above - may bring in some personal views and/or style, but lean (how much depending on age) towards more the more low-key.
My style of investing is certainly nontraditional, but I don't believe there's one path to investing, either. A lot of being nontraditional, I find, results in learning experiences and trial-and-error, including things like investing in foreign market funds and taking larger-than-average bets on themes like emerging markets or hard assets. For me, investing becomes - for better or worse - a lot of my worldviews, interests and particular, almost abstract-ish/outside the box style. Sometimes it works wonders, sometimes it doesn't, but it's always interesting and I think - at my age - trying to veer from the traditional has lead to a great deal more in the way of learning experiences.
I don't think that anyone nearing retirement age should do what I'm doing, and while I've shared parts and pieces, I think those who find what I'm doing interesting and want to invest in some of the things that I'm in are welcome to do so, although that's their decision and only after they've done their research.
It's difficult, because I can make blanket statements about my views, but they aren't going to be right for everyone nor would I recommend them to everyone, but I think it's difficult to break down what audience I'm recommending something to with each statement.
That said, if someone specifically says, what would you recommend off the top for someone who's 78, I'm definitely going to recommend something I think is appropriate, more traditional and yet, can still incorporate elements of my particular style or view. I can like hard assets and commodities, but I really think the realities and the priorities for an older person are different, and a priority - I think - is being able to sleep at night and far more preservation and I think (especially over the next decade) an increasing priority on (relative) stability.
Being "un-traditional" in approach is not necessarily better or worse, but I'm also well aware that most people understandably don't want to devote the time or enjoy the research. I like research, but know I could never have the patience or desire to try to pull off the timing/chart strategies that some people on this board have managed to do well with.
I don't have a high risk tolerance, either, and as I noted above, if I were to recommend a portfolio to a 38-year-old, it would still likely come in at a lower level of risk than some would think appropriate and that comes from a place of believing that the recent volatility could continue or get worse for a long while, and rather than trying to swing for the fences, trying to swing for consistent singles/doubles and maybe luck into a few triples will be a better approach for the average person.
I suppose one could say that some of the larger bets that I'm making are attempts to see over the horizon and pick my spots for what *I* personally believe will be longer term home runs and while some may not agree with my reasoning (and I don't expect them to), these choices - like everything else - comes after a great deal of thought and reasoning. I'd say most of the rest of my investments are attempts at singles (a lot of the alternative investments) or doubles. There will be some strikes.
My method of investing is definitely abstract and takes the risks that I think are desirable for the next 5-10 years, but much of the remainder is decidedly lower/low-key.
Thanks for your explanations of your strategies, particularly how you would apply them for younger clients.
I was particularly interested by your inclusion of the absolute return-type funds (Marketfield, AQR Risk, Arbitrage Event) in the portfolio. You're certainly not in the mainstream in your overall strategy, and so it's very helpful to see these specific fund picks.
Thank you for your input on our behalf. I will include
the mutual funds and the etf PFE in my homework
to do before 1-1-2012.
regards
circa33