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. 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..... Today and with the past few weeks; the markets, I suspect our house may fall within the "lucky" area of investing for this 2012 year. I seldom do not have a feeling about some flow of intuition about where the monies should be, based upon our risk and reward sentiment. I find little guidance at this time. Perhaps it is just me, the phase of the moon or the doldrums one periodically encounters with any task of thinking. I recalled the lines of Clint Eastwood/Dirty Harry asking whether the punk felt lucky or not. Lucky and chance of draw to being in the right place at the right time is my best guess right now for the markets. I have placed a short list of recent items that have caught my attention. There are many other areas and items, too. I do not attempt to show the list as negative in aspect; only to a few items that are floating around and in global events. Not that there isn't always something going on in some part of the world which may affect investments.
Random thoughts, no particular order of priority:
1. Who is really doing the deal in Europe, and why?
a. ECB okay with breaking existing rules for bond holders, who may bend over and take the medicine.
b. Dear EU, take the medicine and let Greece go its own way. If you (EU) mess this up in a bad way;
many others will be in line for the same handouts. The trap is already set.
2. Some EU countries agreed to sanctions and not buy Iranian oil beginning July 1.
a. Opps, Iran announces; well, you may all bite our back side, we'll stop shipping to you, March 1.
*****update, Feb 19; Iran announces crude ship stoppage to France and England
b. Iranian sanctions are supposed to stem flow of U.S. dollars to Iran.
c. Not so fast, say some countries; we need the oil and we'll pay with gold (India reported story).
d. Iran reportedly needs grains (poor crop production) and is willing to do a swap/barter.
e. Russia smiles, a "crude" smile indeed !
f. The big, "uh-oh"; will global trades in commodities move away from a $US basis?
3. What to do about Syria? UN gives the voted hand slap; excluding China and Russia votes....uh-oh.
4. Social economists express, housing problem will be helped from the young ones and family formations.
a. Okay, but familes can not form without real and lasting employment; other than minimum wage.
b. "a", a catch22; if I have ever seen one.....
5. Cheap money, U.S., Japan and more coming in Europe, where central bank rates have to move down again.
6. Elections coming in many places; with some likely changes in "styling and profiling" by candidates.
a. one French contender states that he will undo the Euro-Pact agreements.
b. Germany......well, who knows, eh?
c. U.S.; take your best guess. Politicians, most of whom are not business oriented; but lobbied by those who are.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CAhttp://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HFSuch 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:
NONEA reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 2.6%
PRPFX ....YTD = + 6.5%
SIRRX .....YTD = + 1.3%
HSTRX ....YTD = + .65%
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:Our holdings had a + .16 % move this past week. For the better part of 2011 the investment grade bonds in our portfolios supported weakness in the equity and high yield bond holdings. The early part of this year shows a partial reversal forming; in particular since around January 17. No, investment grade bonds/funds have not become trash; but within the last month, a small sideways movement seems to be taking place. I have read this and that to find some knowledge about this; as usual one may find any number of conflicting viewpoints. Flows to many bond areas are still reported to be very large. New issues of bonds in many sectors are also very large. Perhaps a balance of money flows is meeting an issue flow. One still must consider how many big traders are watching Europe to find and know about a true agreement related to debt there. Very large holders (pension funds)of bonds will also maintain some long term positions in various bonds. Too many things in place right now to get a good feel for where equities and many bond types will be at the end of March. I note the month of March; as I feel this may begin to tell more of the story; as in theory, we may know about a resolution regarding Greece. I note this particular piece of writing to some bond sectors; but the equity sectors may be affected no less. Our house is not selling any bond funds at this time; as this area still may prove to be a smoothing factor again in 2012. I find little to convince this house that 2012 will be any less difficult to navigate than was 2011. A quick look at my words seems to find, at least for me; that I have not really written much of note. Me thinks I'm having an off-month for thinking. A summary may find: watching investment grade bonds for near term trends and sitting tight with all of our holdings until the end of March; barring a nasty event; and finding that this year, our house may just plainly be LUCKY. I better stop now; before the writing becomes more confusing. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
Not Classified 0.00%
***about 35% of the bonds are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-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
MACSX Matthews Asia Growth-Income
Comments
Thank you for the pat on the back; we'll see how it plays out, eh?
As to the portfolio, yes; it is tipped towards bonds; but as noted in the post:
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
Not Classified 0.00%
***about 35% of the bonds are high yield category (equity related cousins)
It is some type of barbell portfolio; although it is difficult to know the balance point on any given day.
Hopefully, the portfolio won't become a "dumbell" model.
Take care,
Catch
The twitchy part is that the past two weeks are about flat for the overall portfolio. This is not to say that the markets are out of sorts with the runs in many equity sectors; but that our portfolio "feels" the changes. Also, that we will not necessarily move anything around at this time; as noted in the post. I find it difficult that there will not be some profit taking in some equity sectors. A little too hot, I do believe.
We're all just having a lot of fun, eh?
Take care of yourselves up there,
Catch
I noticed that you visited Kenster's recent post from R. Rodriguez/FPA. The first several pages of his write express my ongoing concerns, too.
I do not have the skills or time to dig into all of the data and provide concise thoughts; as was presented in his paper; but I try to absorb as many nuggets of information from various sources and try to place the puzzle pieces as they might fit into our portfolio choices.
The old crystal ball remains a bit fuzzy. Our portfolio is surely a lot "hotter" to the risk, vs Mr. R's thoughts.
I will note, not unlike probably many other individual investors and again noted in R. Rodriguez 's write about changes in portfolio thinking: Prior to June, 2008; our house was 90% equity funds, with PTTRX filling the other 10%. We had been in this mix for 30 years. In 2008 and 2009 our portfolio morphed into part of its current mix. We have had as much as 30% involved in equity funds since mid-2009. We don't trade/move monies very often; but have continued to adjust. I won't dismiss the fact that yields on some types of bonds will not offer much going forward and as I noted, Treasury issues in particular are at what appears to be a bottom base.
However, there continues to be so many over-hanging issues. What is in the future for any actions towards Iran? At what point do gas prices in this country cut into spending habits of the consumer; which is immediate, but not a statistic for several months? How many investors who did have large losses in 2008/2009 and the young investors who have been watching will not invest in the markets at all? Lots of money being thrown at circumstances, here and in several other large economies. Mr. Bernanke indeed favors inflation over deflation; and I suspect this is fully what he thinks he sees right now; as well as the cranial/rectal inversion of policies and plans from the WH and congress. Whether the Fed and others are able to control possible future affects of too much money in the pipeline should be a concern. I am also not optimistic of the abilities of central banks to smooth money moves in a managed fashion. I continue to look at the "watched" indexes such as SP500 and others from the high points back in 2007 when there was piles of cash flying around. What is in place today that could cause those levels to be reached again? Fundamentals of companies and their earnings? I am not so sure. There will indeed be companies and sectors that will prove more profitable going forward. Part of our thinking regarding this is our holding of Fido Select Leisure. This fund has the likes of McD's and other food/restaurant companies. This plays to old habits of fast food and related; here and global expansion to attempt to form these habits (emerging markets).
Another point in R. Rodriguez's write, in the first several pages; is trying to determine if one's delay in taking actions for a particular investment is really a delay and that one has missed the boat. The past several months in equity actions is a fine example of this. This is the most difficult part of investing; in my opinion. Have I missed the boat, or is this a trend with legs? How long does one ride a particular investment area?
Our house will watch a few of our funds that are less diversified in the bond areas; although most have a fairly wide range of choices. As to the equity area: the last two years have shown sell periods in late spring (May). Some of this was the continued problems in Europe. Trying to determine whether this was just a combination of problems or the "sell in May" deal is our biggest question now.
We don't have a lot to take off the table in the way of equity holdings; but a larger portion in their cousins of HY bond funds; which could be affected by an equity sell-off.
We'll stay in place for now with our holdings, but will pay close attention to broad movements going into the next several months. Our portfolio did as well as many last year; but perhaps we indeed will only be lucky this year. I find little to show this year to be a smooth ride in investing.
Sven, I did a quick read of this. It seems to read like a politicians statement of words; but not saying much. Hopefully, I may have noted something of value.
Regards,
Catch
Have a very good week !
Derf
Yes, I watch the daily prices on the unleaded gas contracts and attempt to plan accordingly. We drive pass the same station several days each week; so we are not traveling out of our way to purchase. I filled both vehicles last Thursday for $3.10/gal. Sunday evening the price was at $3.50. Today, it is back down to $3.36. Me thinks there is sometimes some funny business with all of this.
Take care,
Catch
p.s. Glad you've returned to cover my backside, if I get in too deep. There are times I may actually be talking or writing past my knowledge base.
Well, be careful out there, eh? Gonna try to find a bit more time in the next few days to study our holdings with a finer look.
Take care,
Catch
Our portfolio mix is not parked in program or spreadsheet of any type. So, I am not able to provide any type of pure breakdown of what % of a given group provided which portion of the return YTD. The best I can provide is the following:
YTD return for the equity portion = 10.3%
YTD " " " HY/HI bonds = 4.7%
YTD " " " all other bond funds combined = 2.8%
'Course the problem with these numbers in this form, is that not all of the 3 broad groups are of equal weight. Several of the funds are mixes of bonds and equities, so the problem becomes more complex.
From our mix; we monitor performance for each fund, to determine if any new action is required. Not unlike the Funds Boat write each week, each fund is also checked for direction.
Tis the best I can provide for your question.
Take care,
Catch