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..... Tinker: the archaic meaning generally reflects to a person who traveled the road and repaired household utensils....metal pots and pans and related. The older reference also indicates a person of the poor working class and uneducated. However, one must consider that this work required a broad-based knowledge of many areas; as one may consider that such a person was also employed to perform many other types of repairs while in the community or at a household. The tinkerer was only uneducated in some areas; not unlike the broad citizenery now. Today, many consider the word to also have the meaning: "To exert one's self for a purpose; to put forth effort for the attainment of an object; to labor; to be engaged in the performance of a task, a duty, or the like." While one's skill set may not be in a particular area of effort; we may still "tinker" around with something; be it planting flowers in the springtime of the year around the house, simple painting of the interior or exterior of the home or simple repairs around the household; be it replacing this or that or a repair of the lawnmower. While these areas may not be our primary knowledge area; we are bright enough to read and consider whether the task is within grasp of the efforts to attain a "decent" outcome; or whether to leave the circumstance to those skilled in the task; to hire someone.
This reflection upon tinker, reminds me of myself and others; we individual investors.
Although I do not know the composition of other's portfolios; I do assume there is "tinkering" in place; now and then.
This brings me to a recurring thought about portfolio tinkering at this house. Some days, tinkering is a lot of fun and one is always learning something. Our house doesn't tinker very much, with only a few funds changing in a year's time. This brings me to the active managed/traditional vs the eft fund. I will note a few quick and dirty numbers; although these eft's would not be my primary choices. Starting with year 2006 and including 2011 returns for these two eft's; VTI and BND , and one having 50% in each, the average return over this period = +3.35%. Our portfolio over the same time period average = +6.4%. To be fair about this compare; VTI is U.S. equity based and had a - 37% in 2008. We sold 84% of our equity portfolio in mid-June of 2008. Obviously, these two holdings views are not twins in construction; and the VTI and BND are indicated with a buy and hold position maintained.
As 1/3 of our account holdings are currently with Fidelity; we have access to 30 etf's that provide nominal exposure to numerous market sectors; and the price is right, too. Beyond this, the brokerage function of the accounts offer whatever etf we may choose, although at a higher cost (trading fees).
The next question this house must answer is whether we may provide similar results as in the past, using etf's for this function. Are we able to find and/or manage etf's that would replace managed mutual funds; several of which, have management skills with which we are most satisfied. Could we be more skilled than the management of FNMIX ? Or FLPSX ? Might it be just as easy and with acceptable results to hold TIP versus FINPX ? I am not assured of this. Even for monies invested in gov't tips bonds, active managers may move among the durations as they feel indicated. We could try to provide a similar exposure using STPZ LTPZ and TIP . Yow......too much work there, eh?
Another question. Would this house become more "twitchy" about moving monies around more frequently? We have not been a house which flips funds often, and we suspect this temperment would be maintained. Although one must consider the low cost of flipping among some etf's.
The question that becomes presented is whether to gather a basket of 12-15 etfs to attempt to match our holdings at any given time. At the very least, we could gather .30-.40% of reduced fund expense fees. M* indicates our current average expense ratio of .70%.
A fling it "here and there" could include lg cap, mid cap, sm cap of a blended and domestic/international flavor. Bond styles could be mix and/or matched to one's choices. Special sectors may be thrown in to suit one's market thoughts or trends. And no, I don't think this house would be or become a "lazy portfolio" of buy and hold. Although some statistics indicate a reversion to the mean for a given market area over time; I know we would still practice our own form of "reversion to our own mean"; attempting to minimize the downside and preserve capital. Time is not in this house's favor. Now if we were 30 years old again..............
A result into the future may be a mix of active managed funds and eft's, or perhaps an index here and there, too.
Well, just some out loud thinking and writing.
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 = + 2.9%
PRPFX ....YTD = + 7.9%
SIRRX .....YTD = + 1.5%
HSTRX ....YTD = + .60%
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 + .62 % move this past week. The old Funds Boat is at anchor, riding in the small waves; watching the weather and keeping the existing cargo. 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 bond total 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
Came across this article in the morning. Not exactly what to make of it. To do well, one must able to time the market just right. So this leaves me out for sure.
http://www.marketwatch.com/story/is-the-bond-bubble-about-to-pop-2012-02-24
Investor's note about FFGCX notes the exposure to energy and natural resources/materials and also includes agri products equity exposure. The layout of this fund is about 1/3 in each of energy, nat. res. and agri equity.
Also, other equity holdings have energy pieces here and there. FCVSX has about 50% of its holdings in energy. FDVLX FLPSX FSLVX and RNCOX have energy holdings that range from about 10-16%.
As to the total of +.62% last week for our mix; there were a few days when the markets continued mixed messages of broad sectors all moving in the same direction. If I recall properly, on Thursday last week; every fund we have was positive for the day. This covers a lot of very diversified sectors. Connected moves like this are also something we watch and show or tell us that there remains a very divided group of major investors placing their monies with opposing thoughts about the direction(s) of the global economies. Our holdings received positive bumps in about every sector.
U.S. 7 year Treasury issues had a fairly high demand last week and helped to push yields a bit lower.....again. Ya, I know; it all seems crazy some days, and I won't disagree. In light of the positive Treasury auction, one also finds some other equity sectors continuing to move forward. As to whether there is any indicator of a "cross roads" of change coming for one area or another; I find it difficult to note today. Some of this action is not unlike 2011. As I noted previous; some of us may be plain and simple lucky this year with being in the favored markets of the year.
Thank you for the bond bubble story link. And if one was able to move successfully from sector to sector over the years; a most wonderful rate of return would be had, eh?
Take care,
Catch
(OOOPS - one striking omission to above: Residential real estate values continue to drop. We leave further analysis of that to others.)