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Open Thread: What Are You Buying/Selling/Pondering
MikeM said, "Question Hank. Why did you choose to have your Roth in a fund company like Oppenheimer which is know for a couple good funds and some not so good? Why not a brokerage house like Schwab or the like where the selection is better?" -
Hi Mike: I've owned QRAAX (in varying amounts) since around '97 shortly after its inception. It was the first U.S. mutual fund to receive SEC approval to invest in commodities (primarily through derivatives). It did very well for several years. So this unique fund was the reason I invested a relatively small sum with Oppenheimer back in the late '90s.
I already have a lot in other (successful) Roths from past conversions. Those are at Price, Oakmark and D&C. The decision to do this one at Oppenheimer (about 7% of portfolio at the time) was because I owned this fund and felt the odds were very good it would quickly rebound as energy rebounded. Oil had fallen from $120 to around $50 in the 6 months leading up to January. A speculative play.
Can't really respond to why I don't do Schwab or other brokerages. All 5 houses where I invest offer something I need. Oppenheimer has some great funds. I've chosen however to use some of their alternative funds as my "core" portfolio requires them. And alternatives haven't fared well for many years now. QRAAX is more of a "pure play" and reflects the dismal commodities market more than many similar funds. It's tracked the Goldman Sachs Commodities Index very well. (The Index has lost 35-40% over the past year.)
Hmm ... I think the question implies that the decision to do a conversion came first and the fund selection second. Actually, it was the reverse. The fund fell out of bed first, and the decision to convert it to a Roth (and play the tax-free rebound) came second.
Regards
*For clarification: QRAAX has been reduced to only 25% of the Roth being discussed from an original allocation of 100%. (See my previous post)
Reits have been celebrating the Feds inaction. I picked up more VTR last week, and may spring for an additional slug of O.
I like their lack of correlation with the market in general to this point.
Yeah, I thought about picking up income names yesterday but didn't and now they're pretty much all that's green today. That said, I think that many REITs are down far enough that they're still certainly very good values at this point. As for rates in the future, I just think if they're too concerned in September, they're not going to be any different in a month or two or three, so I just don't see it happening this year.
This post follows my earlier post under this thread ... so, you might wish to read them to better understand this one.
I have been pondering what to do, as a retail investor, if anything regarding some distribution funds that I hold within my portfolio. One is AZNAX and the other is IGPAX. As they have continued to disburse through the current market decline both are now approaching the amount I have invested in them. With this, I will be letting them go due to their continued decline in their nav. This will raise my cash allocation to about ten percent above my neutral target of fifteen percent. I am concerned and not encouraged about the upcoming earning season reporting which begins on October 8th. I feel this will be a critical point for the markets and if corporate earnings and revenue look good then perhaps the markets will turn upward for the traditional fall rally. If they continue to decline as they (earnings & revenue) have done so far this year then I feel the markets will continue to decline. Since, I have no idea which direction the markets (and the FOMC) might be headed, I going with caution and raise some more cash. I feel big money has been reducing their leveraged positions and this has put some selling presure in the markets over the past couple of months ... and, if earnings and revenue disappoint then there will be even more selling pressure coming.
I have had some other posters, over the years, call me out on my moves posted after the fact so I now post my thinking and planned strategy in advance. In this way they know it is genuine. I caution all, don't do what I do, or I might do, do your own analysis and due diligence and do what is be best for you. What might be right for me might not be right for you.
I anticipate after these trades are made my asset allocation will reflect a month ending cash position to be around 25%, my income allocation to be somewhere around 20%, my equities to be somewhere around 50% and my other assets (as reported in Xray) to be somewhere around 5%.
In addition ... I wonder what others might be thinking (and doing) along these lines?
Nice post above Old_Skeet. As of last night's close I am 98.8% in cash after selling two bank loan funds. My 1.2% is in IG and will bail on that if it trades down to the 7.90-95 area. You could be spot-on about the upcoming earnings season.
Old_Skeet....your post just reinforces my irritation at the Fed for not moving off the dime. An M* article carries the title, "U.S. Stocks Tumble As Fed Sows Fear And Confusion". I couldn't have said it better myself.
I'm still sitting at 27% cash, having not fully deployed my 401K rollover. I shifted about a third when the initial 10% correction occurred a few weeks ago, and was planning an additional investment when the market would react to the Feds raising of rates...now delayed. So I will continue to wait and watch. Assiduity. I think there will be another entry point within the next few weeks.
I read an article somewhere this week which talked about an upcoming "earnings recession"...more or less a descriptive way to describe what you posted. I fear that the market will react negatively not necessarily to an earnings miss, but to a lowering of expectations for next year's earnings. One of my individual holdings got smacked for that this week...VZ. If this becomes widespread, then Mr. Market will not like that at all.
Of course, if expectations are dramatically lowered, and the companies then beat these lowered forecasts, then all is good....the market takes off...and we all get ponies and become even more handsome.
@Skeet - Thanks for posting. I think you and everyone here tries to be as "up front" in discussing their moves - both successful & unsuccessful - as possible. Personally, I'd rather share a move that hasn't worked for me than something that has. The former is more credible to others and probably more instructive as well.
I read into both your approach (and Junkster's) an interest in anticipating market moves in advance and taking decisive action to protect assets or take advantage of opportunities. That's not everyone's cup of tea. But I'm sure it works for yourselves.
Aside from an occasional speculative move (rarely more than 5-10% of assets), I'm one to allocate broadly, rebalance as necessary, and let the portfolio run. A "stick in the mud" approach. Many years into retirement, I eye Price's retirement funds (TRRIX & TRRFX) for some sort of yardstick of how a conservative investor like myself might be invested and how that allocation should perform.
Yesterday TRRIX fell .62% while my portfolio dropped .77%. For the year TRRIX is down 1.16%, while I am off a bit over 3%, primarily due to having overweighted energy-heavy funds early in the year expecting them to outperform. I've tended in recent years to lag TRRIX by a small amount (usually less than 1%). However, going back to '08-'09, I come out ahead due to an ability to overweight global equities at that time - a nimbleness individual investors enjoy over mega-allocation funds. -
Should have added above that I do vary the cash allocation slightly, remaining in the 10% - 20% range. Currently it is at 10% - which is low. This reflects a belief that some of the beaten-up risk assets (especially natural resources and EM bonds) present far better prospects for appreciation over the next 5 years than cash or cash-like investments, with substantially less risk than these investments would normally entail.
The Fed and the markets continue to surprise. We shall see what the coming weeks bring.
I've been nibbling away at RCS for the past few weeks in the hope that it will rebound. It had a nice bump yesterday. RCS is PIMCO Strategic Income CEF run by Ivascyn.
I added a little to Danaher (DHR). Also added Fiserv (FISV) this week after getting rid of competitor FIS a couple of weeks ago after that company did a huge purchase I didn't like at all. Also added lightly to Ecolab (ECL), which I think has become one of the set of things I view potentially holding for a decade or more.
I thought about Generac (GNRC), which is one of the largest portable generator companies - down enormously after a couple of years of less power outages and weather events. Sort of an imperfect hedge against grid disruption and weather events. Didn't wind up investing in it but pondering it.
May add a little to THQ/HQL and perhaps BIP. I'd like to add to REITs, but I have a lot of real estate, including a very large position in BPY.
Fed inaction really changes nothing in terms of what I'm doing and I really can't see doing much - adding a little here, a little there but trying to keep holdings more focused on core ideas. A lot I don't really want to add any more in terms of their allocation within the overall pie.
>>>I read into both your approach (and Junkster's) an interest in anticipating market moves in advance and taking decisive action to protect assets or take advantage of opportunities. That's not everyone's cup of tea. But I'm sure it works for yourselves.<<<
Hank, not exactly as I would call that style timing and I have yet to meet a successful timer. So hence a style more like *reacting* to market action than anticipating. I treat my trading/investing as a business with the object being *don't lose*. The winners take care of themselves. It's the losers that require quick action. I am up 3.76% YTD. While that may sound fine compared to the overall market it's my second worst year percentage wise over the past thirty and I am not a happy camper. I simply am unable to find meaningful trends in bondland this year that have lasted more than a few weeks or so. Below is a link regarding 3% to 4% asset returns over the next decade by one of the rare people I respect in this business. Albeit would never let anyone (but the market) influence how I trade or invest.
I think any "moderate risk" investor who's ahead by 3.76% this year is doing very very well. So, congrats! ---
The S&P is down by 3.5% YTD
Price's POMIX which tracks the Wilshire 5,000 is off around 3.25%
Short-term stuff (under 2 years) yields less than 0.75% and the 10-year's at just over 2%. (These percentages are before the ER - so short and intermediate bond funds are likely struggling to remain positive.)
I don't follow trends enough to know what has worked. Perhaps Japan - which has rebounded after a 20+ year funk. Maybe some individual issues of junk bonds. The junk funds certainly aren't doing that well. There will also be the occassional lucky fund manager who decides to "short" equities at exactly the right time.
Good luck. And PLEASE sound the "all clear" when you decide to unload that 98% chunk of cash and begin investing again.
Hank, was going to post this but sounds a bit like a drama queen so will just post it hidden in this thread. I am going to delete this fine forum from my computer. Great as it is, it takes up too much of my time and the off trail hiking season at my nearby National Park is just around the corner. I would much prefer to spend my time in search of caves, arches, and waterfalls. So will clock back in whichever occurs first - Dow 18352 or Dow 14681. That would be either new all time highs in the Dow or a bear market with a 20% decline from the highs in the Dow. Will be interesting which occurs first. Good luck to everyone here!
Edit: A little known fact. Kentucky has more arches than any state except for Utah and Arizona.
Hank, was going to post this but sounds a bit like a drama queen so will just post it hidden in this thread. I am going to delete this fine forum from my computer. Great as it is, it takes up too much of my time and the off trail hiking season at my nearby National Park is just around the corner. I would much prefer to spend my time in search of caves, arches, and waterfalls. So will clock back in whichever occurs first - Dow 18352 or Dow 14681. That would be either new all time highs in the Dow or a bear market with a 20% decline from the highs in the Dow. Will be interesting which occurs first. Good luck to everyone here!
Good luck to you and enjoy your time in the outdoors. Would love to see some pictures of the wilderness - and I'm sure others on here would as well - if you have time at some point.
Thanks to those that stopped by especially those that made comments. This is one of the things that I enjoy most about this board is the discovery of what others are thinking. Please note, I am not selling out of my equity and bond positions I am just selling down a few percentage points in each and raising cash by a like amount. I'd rather go into a period of much uncertanity being cash heavy over being cash light. Should it turn out to be blue sky through earning season then I've got plenty of equity to enjoy the upward ride and if the market gains some strength then there is the possibility the fed will begin to tighten into this market strength. I am uncertain as how the markets both fixed income and equities will react to this tightening should it happen. Therefore, I'd like to have a good amount of cash should the markets continue to pull back. And, if they do then I'll most likely raise even more cash through a sell down process as the market declines. Year-to-date I am down a couple of percent much inline with the Lipper Balanced Index; but, I had overall gains this past week that amounted to about 0.2%. So things might be a little better than they first appear ... but, I want to be conserative approaching this rather than being aggressive. I have no fear in my cash going stale ...and, it just might become king, in the near term, within my asset allocation.
Thanks to @Old_Skeet for his recent post and to those who have shared their ideas in response to it. The comments are very useful for a mutual fund investor such as myself. They generally reflect a fairly cautious attitude.
My current allocation is neutral for me at 51% stocks (29% domestic and 22% foreign), 29% bonds, 16% cash, and 6% other. Most of the cash allocation results from decisions made by mutual fund managers (including YAFFX, WEMMX, FPACX, BERIX, and COBYX). I have another 10% or so in "near cash" that is available to put into stocks if conditions warrant. My somewhat contrarian portfolio is down about 2% YTD and about 4% over the past 12 months.
The domestic economy continues to perform fairly well. The consumer continues to be willing to spend. A weak spot is the low level of investment. But, I don't anticipate a recession will occur in the near term unless the worst case scenarios for the emerging market countries and Europe come to pass. And, I continue to wonder what would cause investor sentiment to sour to the extent they would completely boycott the stock market in this low interest rate world in the absence of some sort of extreme event.
If the market does decide to correct, it may turn out to be a decline like 1998 that resolves itself within a few months. Here is a snap shot of that event from the perspective of the US stock market:
An event similar to that one would provide me the opportunity to add DSENX and RPGAX to my core holdings to replace BBTEX and SGENX. I also might add to the small holdings of FOCPX and FPHAX in my mad money account and might open a position in FSRPX if it continues to show relative strength.
@Junkster - Please reconsider. You're one of my favorite posters & I've learned much from you as I'm sure many others have.
But - in a sense - I don't blame you. You've had a good run and deserve to get out and enjoy the rewards you've achieved through all the smart investing.
Take care. Happy trails. Thanks for all the past contributions here. See you on the other side!
I wish you a very enjoyable fall as you hike the mountains and explore.
During part of October, I will be prospecting for meteorites. Through the years I have several that I have found with one weighing about twelve pounds.
You might wish to take a magentic walking stick with you ... I have one. It is one of the means I used as a teenager to find a couple of the meteorites that I have today. Now instead of using a traditional metal detector I use a walking stick fitted with an electronic beeper. With this, when the walking stick comes close to metal objects or certain rocks (meteorites, ferrous rocks, etc.) it beeps.
Comments
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Hi Mike: I've owned QRAAX (in varying amounts) since around '97 shortly after its inception. It was the first U.S. mutual fund to receive SEC approval to invest in commodities (primarily through derivatives). It did very well for several years. So this unique fund was the reason I invested a relatively small sum with Oppenheimer back in the late '90s.
I already have a lot in other (successful) Roths from past conversions. Those are at Price, Oakmark and D&C. The decision to do this one at Oppenheimer (about 7% of portfolio at the time) was because I owned this fund and felt the odds were very good it would quickly rebound as energy rebounded. Oil had fallen from $120 to around $50 in the 6 months leading up to January. A speculative play.
Can't really respond to why I don't do Schwab or other brokerages. All 5 houses where I invest offer something I need. Oppenheimer has some great funds. I've chosen however to use some of their alternative funds as my "core" portfolio requires them. And alternatives haven't fared well for many years now. QRAAX is more of a "pure play" and reflects the dismal commodities market more than many similar funds. It's tracked the Goldman Sachs Commodities Index very well. (The Index has lost 35-40% over the past year.)
Hmm ... I think the question implies that the decision to do a conversion came first and the fund selection second. Actually, it was the reverse. The fund fell out of bed first, and the decision to convert it to a Roth (and play the tax-free rebound) came second.
Regards
*For clarification: QRAAX has been reduced to only 25% of the Roth being discussed from an original allocation of 100%. (See my previous post)
I like their lack of correlation with the market in general to this point.
I have been pondering what to do, as a retail investor, if anything regarding some distribution funds that I hold within my portfolio. One is AZNAX and the other is IGPAX. As they have continued to disburse through the current market decline both are now approaching the amount I have invested in them. With this, I will be letting them go due to their continued decline in their nav. This will raise my cash allocation to about ten percent above my neutral target of fifteen percent. I am concerned and not encouraged about the upcoming earning season reporting which begins on October 8th. I feel this will be a critical point for the markets and if corporate earnings and revenue look good then perhaps the markets will turn upward for the traditional fall rally. If they continue to decline as they (earnings & revenue) have done so far this year then I feel the markets will continue to decline. Since, I have no idea which direction the markets (and the FOMC) might be headed, I going with caution and raise some more cash. I feel big money has been reducing their leveraged positions and this has put some selling presure in the markets over the past couple of months ... and, if earnings and revenue disappoint then there will be even more selling pressure coming.
I have had some other posters, over the years, call me out on my moves posted after the fact so I now post my thinking and planned strategy in advance. In this way they know it is genuine. I caution all, don't do what I do, or I might do, do your own analysis and due diligence and do what is be best for you. What might be right for me might not be right for you.
I anticipate after these trades are made my asset allocation will reflect a month ending cash position to be around 25%, my income allocation to be somewhere around 20%, my equities to be somewhere around 50% and my other assets (as reported in Xray) to be somewhere around 5%.
In addition ... I wonder what others might be thinking (and doing) along these lines?
Old_Skeet
I'm still sitting at 27% cash, having not fully deployed my 401K rollover. I shifted about a third when the initial 10% correction occurred a few weeks ago, and was planning an additional investment when the market would react to the Feds raising of rates...now delayed. So I will continue to wait and watch. Assiduity. I think there will be another entry point within the next few weeks.
I read an article somewhere this week which talked about an upcoming "earnings recession"...more or less a descriptive way to describe what you posted. I fear that the market will react negatively not necessarily to an earnings miss, but to a lowering of expectations for next year's earnings. One of my individual holdings got smacked for that this week...VZ. If this becomes widespread, then Mr. Market will not like that at all.
Of course, if expectations are dramatically lowered, and the companies then beat these lowered forecasts, then all is good....the market takes off...and we all get ponies and become even more handsome.
press
I read into both your approach (and Junkster's) an interest in anticipating market moves in advance and taking decisive action to protect assets or take advantage of opportunities. That's not everyone's cup of tea. But I'm sure it works for yourselves.
Aside from an occasional speculative move (rarely more than 5-10% of assets), I'm one to allocate broadly, rebalance as necessary, and let the portfolio run. A "stick in the mud" approach. Many years into retirement, I eye Price's retirement funds (TRRIX & TRRFX) for some sort of yardstick of how a conservative investor like myself might be invested and how that allocation should perform.
Yesterday TRRIX fell .62% while my portfolio dropped .77%. For the year TRRIX is down 1.16%, while I am off a bit over 3%, primarily due to having overweighted energy-heavy funds early in the year expecting them to outperform. I've tended in recent years to lag TRRIX by a small amount (usually less than 1%). However, going back to '08-'09, I come out ahead due to an ability to overweight global equities at that time - a nimbleness individual investors enjoy over mega-allocation funds.
-
Should have added above that I do vary the cash allocation slightly, remaining in the 10% - 20% range. Currently it is at 10% - which is low. This reflects a belief that some of the beaten-up risk assets (especially natural resources and EM bonds) present far better prospects for appreciation over the next 5 years than cash or cash-like investments, with substantially less risk than these investments would normally entail.
The Fed and the markets continue to surprise. We shall see what the coming weeks bring.
I thought about Generac (GNRC), which is one of the largest portable generator companies - down enormously after a couple of years of less power outages and weather events. Sort of an imperfect hedge against grid disruption and weather events. Didn't wind up investing in it but pondering it.
May add a little to THQ/HQL and perhaps BIP. I'd like to add to REITs, but I have a lot of real estate, including a very large position in BPY.
Fed inaction really changes nothing in terms of what I'm doing and I really can't see doing much - adding a little here, a little there but trying to keep holdings more focused on core ideas. A lot I don't really want to add any more in terms of their allocation within the overall pie.
Hank, not exactly as I would call that style timing and I have yet to meet a successful timer. So hence a style more like *reacting* to market action than anticipating. I treat my trading/investing as a business with the object being *don't lose*. The winners take care of themselves. It's the losers that require quick action. I am up 3.76% YTD. While that may sound fine compared to the overall market it's my second worst year percentage wise over the past thirty and I am not a happy camper. I simply am unable to find meaningful trends in bondland this year that have lasted more than a few weeks or so. Below is a link regarding 3% to 4% asset returns over the next decade by one of the rare people I respect in this business. Albeit would never let anyone (but the market) influence how I trade or invest.
http://www.barrons.com/articles/dangers-facing-stocks-1442529660?mod=BOL_hp_highlight_5
I think any "moderate risk" investor who's ahead by 3.76% this year is doing very very well.
So, congrats!
---
The S&P is down by 3.5% YTD
Price's POMIX which tracks the Wilshire 5,000 is off around 3.25%
Short-term stuff (under 2 years) yields less than 0.75% and the 10-year's at just over 2%. (These percentages are before the ER - so short and intermediate bond funds are likely struggling to remain positive.)
I don't follow trends enough to know what has worked. Perhaps Japan - which has rebounded after a 20+ year funk. Maybe some individual issues of junk bonds. The junk funds certainly aren't doing that well. There will also be the occassional lucky fund manager who decides to "short" equities at exactly the right time.
Good luck. And PLEASE sound the "all clear" when you decide to unload that 98% chunk of cash and begin investing again.
Edit: A little known fact. Kentucky has more arches than any state except for Utah and Arizona.
Okay, take care and thank you again; until the next time.
Catch
My current allocation is neutral for me at 51% stocks (29% domestic and 22% foreign), 29% bonds, 16% cash, and 6% other. Most of the cash allocation results from decisions made by mutual fund managers (including YAFFX, WEMMX, FPACX, BERIX, and COBYX). I have another 10% or so in "near cash" that is available to put into stocks if conditions warrant. My somewhat contrarian portfolio is down about 2% YTD and about 4% over the past 12 months.
The domestic economy continues to perform fairly well. The consumer continues to be willing to spend. A weak spot is the low level of investment. But, I don't anticipate a recession will occur in the near term unless the worst case scenarios for the emerging market countries and Europe come to pass. And, I continue to wonder what would cause investor sentiment to sour to the extent they would completely boycott the stock market in this low interest rate world in the absence of some sort of extreme event.
If the market does decide to correct, it may turn out to be a decline like 1998 that resolves itself within a few months. Here is a snap shot of that event from the perspective of the US stock market:
Link To VTSMX
An event similar to that one would provide me the opportunity to add DSENX and RPGAX to my core holdings to replace BBTEX and SGENX. I also might add to the small holdings of FOCPX and FPHAX in my mad money account and might open a position in FSRPX if it continues to show relative strength.
But - in a sense - I don't blame you. You've had a good run and deserve to get out and enjoy the rewards you've achieved through all the smart investing.
Take care. Happy trails. Thanks for all the past contributions here. See you on the other side!
I wish you a very enjoyable fall as you hike the mountains and explore.
During part of October, I will be prospecting for meteorites. Through the years I have several that I have found with one weighing about twelve pounds.
You might wish to take a magentic walking stick with you ... I have one. It is one of the means I used as a teenager to find a couple of the meteorites that I have today. Now instead of using a traditional metal detector I use a walking stick fitted with an electronic beeper. With this, when the walking stick comes close to metal objects or certain rocks (meteorites, ferrous rocks, etc.) it beeps.
Old School ... http://www.michaelbloodmeteorites.com/Meteorite_Cane.htm
Hi Tech ... http://detectoare-metale.ro/index.php?main_page=product_info&cPath=3_8&products_id=23&language=en
Take care.
Old_Skeet
Derf