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The Power Of Infrastructure Investing In Uncertain Markets
I hold two infrastructure funds in my specialty sleeve found in the growth area of my portfolio. They are PGUAX and TOLLX. In addition, I also hold a private equity fund in this sleeve, LPEFX. With this, my current specialty focus is in infrastructure and in private equity. As of late, the private equity fund has been out performing both infrastructure funds and this might be something others may wish to take a look at. This sleeve makes up about fifteen percent of the growth area of my portfolio.
The way the article is describing infrastructure investments, it could just have easily been describing utilities, pre-1980. Monopolies, regulated, guaranteed reasonable profits (via regulated rates). As it says, airports, pipelines, electric utilities (transmission, distribution), etc.
The kind of company that AT&T was under the 1956 consent decree, but not after the 1982 consent decree; when AT&T agreed to split up in order to enter competitive markets. IMHO communications companies may be infrastructure, but they don't fit what the article is writing about.
The article is also focused on operators as opposed to construction - again, think pre-1980 utility cash cows. If one expands the definition of infrastructure (as is often done by funds in various other sectors), here to include its construction, then stability decreases, but potential gain would seem to increase.
I rarely invest in sectors, but when I do, I go in with a clear idea of why; something more than saying the world needs to build/rebuild infrastructure. There are different ways to approach infrastructure; this article is describing one.
One that happens to suit me, just as I keep thinking about FKUTX, the closest thing to a "traditional" utility fund - focused on real utilities, regulated, good cash flows, etc.
As the article points out, these companies are likely to get oversold as (if?) interest rates rise. I don't expect the same behavior of funds that focus on their construction as opposed to operation.
Hi Old Skeet! As you hold three (3) funds in this space worth 15% of your portfolio, the one I like the best is LPEFX.....the other two (2), not so much......#@!**......uh, that was Duke, and I cannot repeat what he said, the little Putin. But GLFOX, in my opinion, is the best of breed, so please look at it. TOLLX looks like an index hugger on Fidelity's website. God bless. the Pudd p.s. Have you any new themes for 2016 to invest in? I'm looking for a pullback early in the year (January or February). Will buy FBSOX....have watched it for a long time.....now I want some. For some mad money this year, I'm going into FSHOX. Looking for La Nina later in 2016......maybe I can make some money off of that.
Thanks for stopping by and making comment along with the questions.
Please note, (a correction to your comment) the specialty sleeve accounts for about 15% of the growth area of my portfolio which also amounts to about five percent of the overall equity allocation and two and one-half percent of the overall portfolio.
Some of my themes and funds held representing these themes for 2016 ... In fixed income I like bank loan (GIFAX), short duration (LALDX) and convertible securities funds (FISCX); and, on the equity side I favor the didvidend payers (FDSAX) and world equity funds (DEQAX) along with world allocation funds (BAICX) and perhaps throw in a good stock picking fund such as Janus Forty (JDCAX) 'not owned' and, then add a conserative play to cover stock market volatility (CTFAX). In addition, I think private equity will do well (LPEFX).
These are not all the themes I have going into 2016 ... but, it covers a good wide spectrum of them.
Thanks for the tip on GLFOX. I'll make study of it.
Hi Skeet! I looked at some of your funds.....the two (2) world funds.....do you not think the dollar will get stronger next year? FDSAX - CTFAX - they both look good. I own GLRBX and BPAVX. In those spaces have also been looking at HLPPX and WAVIX. But must see a pullback to buy....a large one, I might add. God bless. the Pudd
Hi again ... and, now back to you (@Puddnhead) ...
The fund picks that I listed above to play the respective strategies noted above in my post come from my choice of funds I currently own. Remember, I practice a win, place, show investment style within my portfolio. An example of this is found within my global hybrid sleeve which currently holds (three picks) BAICX, CAIBX and TIBAX and in my global equity sleeve which holds (three picks) CWGIX, DEQAX and EADIX. Of the three, my pick to expand global hybrid is BAICX; however, the other two may also perform well and be contributors to the strategy or even out perform my pick to expand. So just because I referenced one fund in the above post for a strategy there could be some other funds owned that could become contributors to the success, or failure, of the overall strategy as well.
From what I am finding the Dollar has been weakening thus far in December against many foreign counterparts. Will this weakening continue into 2016 is a good complex question with no simple answer. However, I am thinking that the developed foreign markets (especially Europe) will fair better than our domestic markets; and, this is why I am favoring world equity and world allocation funds. In this way the fund manager can decide which securities will be the better fit. My choice in domestic dividend payers (keeping my choices within current funds owned) to best play this theme is FDSAX (with other funds within its sleeve perhaps being contributors as well) and from a world equity perspective is DEQAX representing my pick from its sleeve. I am not expecting much from earnings growth in the S&P 500 Index for 2016 as they have been in decline for much of 2015 as reported earnings started 2015 at $102.31 and have now declined through November to $94.07. I feel domestic corporate earnings will do good to recapture what has been lost during the 2015 declined in the coming year. I look to see the better earnings coming from establised foreign companies thus a world perspective outlook, for me, on this.
I hope, this has better explained some of my thinking and my fund choices. They may not be the best there is to be had but they are what I have to pick from within my current fund holdings. To complete the package, I just might add JDCAX to the current mix (to be held in the spiff sleeve) in the near term; but I want to see how the first ten trading days in January go. As old folklore has it ... "As goes January, so goes the year."
Take care and best wishes as we close out 2015.
Old_Skeet
A question for Duke, if I may? What do you think of the outcome of the recent Indiana vs. Duke bowl game? Is it thumbs up for Duke or thumbs up for Indiana? I can't see old Duke pointing against well ... old Duke. Go Duke!
Hi Old Skeet! One last time....you give a working man off and it rains every day. And this is what you get. lol.....I see the global hybrid sleeve has value as its stock theme---and large. The bonds are spread around. Your global equity, again, large....I was wondering: do you take dividends for income or let them ride -or- do you have an income sleeve for that purpose? I agree. Europe looks to be the place to be, but I thought that this year. Soooo,....my opinion of the dollar is this: higher than 2015. Why? I'm thinking two (2) more rate rises: one in June and one after the election in December. So my thinking is more of the same overseas. I'm also looking at RYSBX. For a while, with the dollar down, now I'm going to start a small position a different way to play. With all the QE at work as for January 1st, I agree that seems to work as well as anything else. Also, as the name implies, "Go DUKE!" lol God Bless the Pudd p.s. Have you been selling anything lately? I have been in the Santa rally.
In a sense I have been selling of late becasue I've taken most all of my capital gain distributions in cash. In doing this, by my thinking, has lowered my allocation to stocks by a couple of perentage points. I want know for certain how my portfolio bubbles to after the first of the year and have received all the year ending distributions along with completing a year ending Xray analysis of the portfolio as a whole. I most likely will set these distributions aside and hold them in the demand cash sleeve to fund some future spiff buys.
Currently, my portfolio as November ending bubbles by Morningstar's Xray analysis around 25% cash, 20% bonds, 35% domestic stock, 15% foreign stock and 5% other assets. I'll probally keep this allocation through much of 2016 unless there is a good downdraft in the stock market making its valuation more attractive for purchase.
For information purposes my two infrastructure funds PGUAX (up 2.54%) and TOLLX (up 2.49%) are the two best performers within my portfolio for the past week and placing third, in the show position, was my world stock fund pick DEQAX (up 2.38%). My private equity fund (LPEFX) finished back in the pack (up 1.84%). With this, my specialty sleeve over the past week was the best performing sleeve wthin my portfolio being up 2.26%. Also, my fund pick for stock picking (JDCAX), not currently owned, made a respectable showing with a return of 2.14% for the week. Incomparison, the S&P 500 Index fund (SXPAX), which I use as a proxy for the Index, returned 1.95% for the same period. My domestic equity fund pick FDSAX was up 1.82% trailing the Index.
@Old_Skeet Oh, c'mon, have you forgotten what often happens after Santa Claus comes to town? Followed by all that hot mindless pension fund and IRA money that floods in the first week of January? And then the bulimic burp and belch down of the mkt as it is digested? If you have something that needs a trim, it's often a good time to pick up a few extra pennies without having to worry about the steam roller. But don't wait too long-- there are quite a few who know about this perk, it evaporates quickly.
In this bull market run I have been trimming both my bond allocation (due to rising interest rates) and equity allocation (due to valuation) over the past couple years raising cash for sometime now. Currently, being 20%+ in cash I have been patiently awaiting a good stock market downdraft say around 15% to develop. With stocks in the S&P500 Index selling on a reported earnings basis of about a P/E Ratio of 23 I have not been doing any major buying but have been trimming select positions. Overall, I sell into strength and buy in weakness. Infrastructure has been weak for the past year, or so.
According to my November ending Xray analysis my portfolio bubbles at about 25% cash, 20% bonds, 35% domestic stocks, 15% foreign stocks and 5% other. Not selling at this time nor buying much either ... awaiting a good downdraft.
I was just making note to the board how my selected fund picks to play certain strategies found within my portfolio have been responding during the Santa rally. It will be interesting how they perform along with the Index come 1st quarter and on into and thru 2016. Please note, I tweak my portfolio from time-to-time as how I am reading the markets and may move some things around within my sleeves without changing my portfolio's overall asset allocation.
I agree, if I had some things I'd like to sell, or even trimming a position back, selling into strength is a good strategy.
@msf brilliant observations. Two points worth repeating. Deregulation has completely changed what utilities as a sector meant in the past for diversification. Just because something is necessary doesn't mean there is necessarily money to be made re: infrastructure
Hi guys! I sure am glad I sold a few things when Santa pulled in for gas and go pit stop. Duke thinks shit will hit the fan in January. Myself, I think it hits the yard once or twice a day from the shoveling I'm doing. God bless the Pudd p.s. vkt: I agree with you. Just because it's necessary doesn't mean there's money to be made in it.
Comments
The kind of company that AT&T was under the 1956 consent decree, but not after the 1982 consent decree; when AT&T agreed to split up in order to enter competitive markets. IMHO communications companies may be infrastructure, but they don't fit what the article is writing about.
The article is also focused on operators as opposed to construction - again, think pre-1980 utility cash cows. If one expands the definition of infrastructure (as is often done by funds in various other sectors), here to include its construction, then stability decreases, but potential gain would seem to increase.
I rarely invest in sectors, but when I do, I go in with a clear idea of why; something more than saying the world needs to build/rebuild infrastructure. There are different ways to approach infrastructure; this article is describing one.
One that happens to suit me, just as I keep thinking about FKUTX, the closest thing to a "traditional" utility fund - focused on real utilities, regulated, good cash flows, etc.
As the article points out, these companies are likely to get oversold as (if?) interest rates rise. I don't expect the same behavior of funds that focus on their construction as opposed to operation.
As you hold three (3) funds in this space worth 15% of your portfolio, the one I like the best is LPEFX.....the other two (2), not so much......#@!**......uh, that was Duke, and I cannot repeat what he said, the little Putin. But GLFOX, in my opinion, is the best of breed, so please look at it. TOLLX looks like an index hugger on Fidelity's website.
God bless.
the Pudd
p.s. Have you any new themes for 2016 to invest in? I'm looking for a pullback early in the year (January or February). Will buy FBSOX....have watched it for a long time.....now I want some. For some mad money this year, I'm going into FSHOX. Looking for La Nina later in 2016......maybe I can make some money off of that.
Thanks for stopping by and making comment along with the questions.
Please note, (a correction to your comment) the specialty sleeve accounts for about 15% of the growth area of my portfolio which also amounts to about five percent of the overall equity allocation and two and one-half percent of the overall portfolio.
Some of my themes and funds held representing these themes for 2016 ... In fixed income I like bank loan (GIFAX), short duration (LALDX) and convertible securities funds (FISCX); and, on the equity side I favor the didvidend payers (FDSAX) and world equity funds (DEQAX) along with world allocation funds (BAICX) and perhaps throw in a good stock picking fund such as Janus Forty (JDCAX) 'not owned' and, then add a conserative play to cover stock market volatility (CTFAX). In addition, I think private equity will do well (LPEFX).
These are not all the themes I have going into 2016 ... but, it covers a good wide spectrum of them.
Thanks for the tip on GLFOX. I'll make study of it.
I looked at some of your funds.....the two (2) world funds.....do you not think the dollar will get stronger next year? FDSAX - CTFAX - they both look good. I own GLRBX and BPAVX. In those spaces have also been looking at HLPPX and WAVIX. But must see a pullback to buy....a large one, I might add.
God bless.
the Pudd
The fund picks that I listed above to play the respective strategies noted above in my post come from my choice of funds I currently own. Remember, I practice a win, place, show investment style within my portfolio. An example of this is found within my global hybrid sleeve which currently holds (three picks) BAICX, CAIBX and TIBAX and in my global equity sleeve which holds (three picks) CWGIX, DEQAX and EADIX. Of the three, my pick to expand global hybrid is BAICX; however, the other two may also perform well and be contributors to the strategy or even out perform my pick to expand. So just because I referenced one fund in the above post for a strategy there could be some other funds owned that could become contributors to the success, or failure, of the overall strategy as well.
From what I am finding the Dollar has been weakening thus far in December against many foreign counterparts. Will this weakening continue into 2016 is a good complex question with no simple answer. However, I am thinking that the developed foreign markets (especially Europe) will fair better than our domestic markets; and, this is why I am favoring world equity and world allocation funds. In this way the fund manager can decide which securities will be the better fit. My choice in domestic dividend payers (keeping my choices within current funds owned) to best play this theme is FDSAX (with other funds within its sleeve perhaps being contributors as well) and from a world equity perspective is DEQAX representing my pick from its sleeve. I am not expecting much from earnings growth in the S&P 500 Index for 2016 as they have been in decline for much of 2015 as reported earnings started 2015 at $102.31 and have now declined through November to $94.07. I feel domestic corporate earnings will do good to recapture what has been lost during the 2015 declined in the coming year. I look to see the better earnings coming from establised foreign companies thus a world perspective outlook, for me, on this.
I hope, this has better explained some of my thinking and my fund choices. They may not be the best there is to be had but they are what I have to pick from within my current fund holdings. To complete the package, I just might add JDCAX to the current mix (to be held in the spiff sleeve) in the near term; but I want to see how the first ten trading days in January go. As old folklore has it ... "As goes January, so goes the year."
Take care and best wishes as we close out 2015.
Old_Skeet
A question for Duke, if I may? What do you think of the outcome of the recent Indiana vs. Duke bowl game? Is it thumbs up for Duke or thumbs up for Indiana? I can't see old Duke pointing against well ... old Duke. Go Duke!
One last time....you give a working man off and it rains every day. And this is what you get. lol.....I see the global hybrid sleeve has value as its stock theme---and large. The bonds are spread around. Your global equity, again, large....I was wondering: do you take dividends for income or let them ride -or- do you have an income sleeve for that purpose? I agree. Europe looks to be the place to be, but I thought that this year. Soooo,....my opinion of the dollar is this: higher than 2015. Why? I'm thinking two (2) more rate rises: one in June and one after the election in December. So my thinking is more of the same overseas. I'm also looking at RYSBX. For a while, with the dollar down, now I'm going to start a small position a different way to play. With all the QE at work as for January 1st, I agree that seems to work as well as anything else. Also, as the name implies, "Go DUKE!" lol
God Bless
the Pudd
p.s. Have you been selling anything lately? I have been in the Santa rally.
In a sense I have been selling of late becasue I've taken most all of my capital gain distributions in cash. In doing this, by my thinking, has lowered my allocation to stocks by a couple of perentage points. I want know for certain how my portfolio bubbles to after the first of the year and have received all the year ending distributions along with completing a year ending Xray analysis of the portfolio as a whole. I most likely will set these distributions aside and hold them in the demand cash sleeve to fund some future spiff buys.
Currently, my portfolio as November ending bubbles by Morningstar's Xray analysis around 25% cash, 20% bonds, 35% domestic stock, 15% foreign stock and 5% other assets. I'll probally keep this allocation through much of 2016 unless there is a good downdraft in the stock market making its valuation more attractive for purchase.
And so it goes ...
Old_Skeet
Thanks for stopping by and making comment.
In this bull market run I have been trimming both my bond allocation (due to rising interest rates) and equity allocation (due to valuation) over the past couple years raising cash for sometime now. Currently, being 20%+ in cash I have been patiently awaiting a good stock market downdraft say around 15% to develop. With stocks in the S&P500 Index selling on a reported earnings basis of about a P/E Ratio of 23 I have not been doing any major buying but have been trimming select positions. Overall, I sell into strength and buy in weakness. Infrastructure has been weak for the past year, or so.
According to my November ending Xray analysis my portfolio bubbles at about 25% cash, 20% bonds, 35% domestic stocks, 15% foreign stocks and 5% other. Not selling at this time nor buying much either ... awaiting a good downdraft.
I was just making note to the board how my selected fund picks to play certain strategies found within my portfolio have been responding during the Santa rally. It will be interesting how they perform along with the Index come 1st quarter and on into and thru 2016. Please note, I tweak my portfolio from time-to-time as how I am reading the markets and may move some things around within my sleeves without changing my portfolio's overall asset allocation.
I agree, if I had some things I'd like to sell, or even trimming a position back, selling into strength is a good strategy.
I sure am glad I sold a few things when Santa pulled in for gas and go pit stop. Duke thinks shit will hit the fan in January. Myself, I think it hits the yard once or twice a day from the shoveling I'm doing.
God bless
the Pudd
p.s. vkt: I agree with you. Just because it's necessary doesn't mean there's money to be made in it.