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The Year Nothing Worked: Stocks, Bonds, Cash Go Nowhere
A year for stock pickers. There have been several stock funds that have managed a double digit gain YTD. And of course the mighty MCXIX is up 48%. Nothing has worked? Bah!
Fixed income cef's with low/no junk corporates, and munis of the lower IG/non-IG persuasion have beaten the S&P 500 pretty handily. Many muni, preferred, and mortgage-heavy cef's are up roughly in the range of 6-12% (some even better), and HY muni oef's (e.g., PHMIX, NHMAX, LHIAX, even the staid VWAHX) are up ~ 4-5.5%.
A fair number of investments worked this year; what didn't work was stock and taxable bond market index funds and junk corporate bonds.
Meanwhile, the cef "experts" at RiverNorth are flat to negative in the highly touted RNDLX (which, with about half in Gundlach sleeves, means a solid negative performance in the cef sleeve), apparently insisting on holding value-trap junky cef's just because the relative pricing is low.
Fixed income cef's with low/no junk corporates, and munis of the lower IG/non-IG persuasion have beaten the S&P 500 pretty handily. Many muni, preferred, and mortgage-heavy cef's are up roughly in the range of 6-12% (some even better), and HY muni oef's (e.g., PMHIX, NHMAX, LHIAX, even the staid VWAHX) are up ~ 4-5.5%.
A fair number of investments worked this year; what didn't work was stock and taxable bond market index funds and junk corporate bonds.
Meanwhile, the cef "experts" at RiverNorth are flat to negative in the highly touted RNDLX (which, with about half in Gundlach sleeves, means a solid negative performance in the cef sleeve), apparently insisting on holding value-trap junky cef's just because the relative pricing is low.
Great post AndyJ. I am a bit anxious about the New Year. Junk corporates best month historically has always been January. It is certainly beaten down and unloved. I have put 10% there already just in case with the remainder still in the junk munis (ABTYX, PYMDX, EIHYX) Will move further into the junk corporates if the market cooperates.
Hi Junkster, right, you have to wonder when and how these current trends are going to break. If I knew of a good HY oef with low/no oil & gas, I'd be watching to put some $ into it, but I don't know of any, so I'm watching and once in a while dipping a toe into cef multi-sectors instead.
P.S. Had the wrong ticker above for the Pimco HY muni fund - it's PHMIX; same fund, different share class as Junkster's PYMDX. It's higher quality junk and a bit shorter maturity/lower duration than a lot of HY muni funds.
The richest people on Earth became a bit poorer this year.The world's richest people lost $19 billion in 2015 Warren Buffett, the world's third-richest person, shed $11.3 billion as Berkshire Hathaway Inc. had its first negative annual return since 2011 Dec 29, 2015 @ 10:09 am By Bloomberg News The world's 400 wealthiest individuals shed $19 billion in 2015, according to the Bloomberg Billionaires Index. Falling commodities prices and signs of a slower-growing China spooked investors around the world leading to the first annual decline for the daily wealth index since its 2012 debut. The world's 400 richest people control a combined $3.9 trillion, according to the index, more than the GDP of every country on Earth except for the U.S., China and Japan. TOP FIVE The market declines knocked 49 billionaires off the daily ranking this year, including Glencore Plc. chief executive Ivan Glasenberg and Wang Jing, a Chinese telecom entrepreneur who personally invested $500 million to help Nicaragua build an alternative to the Panama Canal. Mr. Glasenberg lost two-thirds of his fortune as he raced to slash debt at the Swiss commodities company and Mr. Wang fell by about 86% this year. Not the Banksters ! Elsewhere in the U.S., the rise of dominant investment banks, Goldman Sachs Group Inc. and JPMorgan Chase & Co. made billionaires of their respective chairmen, Lloyd Blankfein and Jamie Dimon, both of them rare instances of hired managers accumulating extraordinary wealth. http://www.investmentnews.com/article/20151229/FREE/151229943?template=printart
More F A N G Daily Insights David Ott, Chief Investment Officer Acropolis Investment Management LLC
...questions and answers from the Barron’s annual ‘Test Your Wall Street Skills’ quiz. Most of the ‘big’ questions have already been answered, but there are still some fun ones:
1. Which ‘FANG’ stocks will fare worst in 2016 – Facebook, Amazon, Netflix or Google?
On average, these stocks have gained approximately 84 percent so far this year – the best being Netflix, up 138 percent and the worst, if you can call it that, was Facebook, which gained 35 percent. Unfortunately, I can write about all four of them since not one is on our Approved List.
This is a tough one because the valuation on Amazon seems so absurd: the price-to-earnings ratio is 956! I thought it looked bad when it was around 100 or so, but betting against Jeff Bezos feels like a bad call.
Google is the only one with a PE ratio of less than 100, so I wouldn’t think they would be the worst, so if it’s between Facebook and Netflix, I would have to say Netflix. I mean, why aren’t all media companies streaming their content at this point? What happens if Apple or Google wants in – isn’t it bad enough that Amazon is offering streaming? That said, I still wouldn’t short Netflix. http://acrinv.com/market-forecasts-part-2/
There were also a few 'low volatility' ETFs that did ok, such as USMV, EFAV, IVW. But have to wonder how they will do if 2016 is similar to 2015. Another good year, or? And there were more than a few outliers that had a very good 2015 that were not just in or even mostly in the hot technology/biotech sector. DRIOX, PKB, domestic PRWAX, PKB; international DRIOX, TGVIX, TINGX, WAIOX, MAPIX; steady CSRSX. Special note goes to closed PRWCX.
Large cap growth generally had a very good year because of the FANGS and related holdings.
Yet short term aside, within the context of 10 year performance strings ( over 90 years ) of a disciplined tactical allocation approach, "flat" years where "nothing works" are occasionally present and part of the process. Sometimes we have to "sit on our hands" in order for long term alpha to materialize ... https://docs.google.com/document/d/1KGHb49SE5Iugr2rLN_maqMH2fgX2s2rP8FYt0ohVJi0/edit?usp=sharing
No FANG here. Mairs & Power just paid, tonight. Still not recorded. I guess my MAPOX was shadow-boxing with the Market in general, all year. PRWCX certainly did beat most OE balanced funds, eh?
@ BobC, don't forget about OSMAX (I have the Inst. version), it's been my winner this year.
Foreign mid-cap growth funds had a great 2015 (OSMAX, AOPAX, PRIDX, etc.) ... so great, that those with the highest P/E's might be ripe for a stallout. (Same with the FI cef rally I mentioned above ... it's been a terrific 6m run, but more than a few are getting up there on relative premium/discount.)
Comments
Quoth @TMFOtter: "Bloomberg describes 2015 as a year nothing worked in investing. Know what does work? Having a timeframe more than 1 year."
I couldn't agree more!!!
A fair number of investments worked this year; what didn't work was stock and taxable bond market index funds and junk corporate bonds.
Meanwhile, the cef "experts" at RiverNorth are flat to negative in the highly touted RNDLX (which, with about half in Gundlach sleeves, means a solid negative performance in the cef sleeve), apparently insisting on holding value-trap junky cef's just because the relative pricing is low.
P.S. Had the wrong ticker above for the Pimco HY muni fund - it's PHMIX; same fund, different share class as Junkster's PYMDX. It's higher quality junk and a bit shorter maturity/lower duration than a lot of HY muni funds.
Warren Buffett, the world's third-richest person, shed $11.3 billion as Berkshire Hathaway Inc. had its first negative annual return since 2011
Dec 29, 2015 @ 10:09 am
By Bloomberg News
The world's 400 wealthiest individuals shed $19 billion in 2015, according to the Bloomberg Billionaires Index. Falling commodities prices and signs of a slower-growing China spooked investors around the world leading to the first annual decline for the daily wealth index since its 2012 debut.
The world's 400 richest people control a combined $3.9 trillion, according to the index, more than the GDP of every country on Earth except for the U.S., China and Japan.
TOP FIVE
The market declines knocked 49 billionaires off the daily ranking this year, including Glencore Plc. chief executive Ivan Glasenberg and Wang Jing, a Chinese telecom entrepreneur who personally invested $500 million to help Nicaragua build an alternative to the Panama Canal. Mr. Glasenberg lost two-thirds of his fortune as he raced to slash debt at the Swiss commodities company and Mr. Wang fell by about 86% this year.
Not the Banksters !
Elsewhere in the U.S., the rise of dominant investment banks, Goldman Sachs Group Inc. and JPMorgan Chase & Co. made billionaires of their respective chairmen, Lloyd Blankfein and Jamie Dimon, both of them rare instances of hired managers accumulating extraordinary wealth.
http://www.investmentnews.com/article/20151229/FREE/151229943?template=printart
Bezo's AMZN
https://www.google.com/finance?q=NASDAQ:AMZN&ei=IDWDVsOTOImPmAG12rmoCg
F A N G stocks here: MGGPX (no NFLX )http://portfolios.morningstar.com/fund/holdings?t=MGGPX®ion=usa&culture=en-US
http://www.morganstanley.com/msim/portal/site/US/template.PAGE/?msimPageTitle=epd_comp&u=86bb14f4dc87daf33d3afb1051a9e009&fund=34183&tabName=epd_comp
Today’s ranking of the world’s richest people
http://www.bloomberg.com/billionaires/2015-12-29/cya
More F A N G
Daily Insights David Ott, Chief Investment Officer Acropolis Investment Management LLC
...questions and answers from the Barron’s annual ‘Test Your Wall Street Skills’ quiz.
Most of the ‘big’ questions have already been answered, but there are still some fun ones:
1. Which ‘FANG’ stocks will fare worst in 2016 – Facebook, Amazon, Netflix or Google?
On average, these stocks have gained approximately 84 percent so far this year – the best being Netflix, up 138 percent and the worst, if you can call it that, was Facebook, which gained 35 percent. Unfortunately, I can write about all four of them since not one is on our Approved List.
This is a tough one because the valuation on Amazon seems so absurd: the price-to-earnings ratio is 956! I thought it looked bad when it was around 100 or so, but betting against Jeff Bezos feels like a bad call.
Google is the only one with a PE ratio of less than 100, so I wouldn’t think they would be the worst, so if it’s between Facebook and Netflix, I would have to say Netflix. I mean, why aren’t all media companies streaming their content at this point? What happens if Apple or Google wants in – isn’t it bad enough that Amazon is offering streaming? That said, I still wouldn’t short Netflix.
http://acrinv.com/market-forecasts-part-2/
Large cap growth generally had a very good year because of the FANGS and related holdings.
Isn't hindsight wonderful!
I tend to ignore the FANG stocks or anything resembling them....for me, they are simply traps.