Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Anyone making any changes to their portfolio for 2016? If so, what are you doing and why? Currently, I own about 30 investments, including OEFs, ETFs and CEFs. I'm looking to whittle it down for 2016, eliminating some investments that appear to be duplicative.
Sometimes some folks just don't comprehend ... I am with you on this and feel five funds is to few.
From my perspective, I believe it to be good wisdom to spread it among a good number of funds.
I have posted my sleeve system a good number of times on the board so I will not do it again in this post unless you ask. It might be helpful for you to review it for some insight as to how I manage and split up my sizeable portfolio.
It's your money and I feel you should do what you think is best.
I agree with both of you. Yes, if you happen to choose the correct 5 funds and/or ETFs, of course that's better. But if you don't, your portfolio could take a major hit. I am fortunate because I have a place to park my cash (family business), where I can get a nice safe return. Don't know what I would do if I had to be 100% invested, or in a cash account yielding 0%.
Agree with @Old_Skeet...it's your money and you have to be able to sleep at night without constantly worrying about your portfolio. And Old Skeet, I've gotten some great ideas from your portfolio...thanks for sharing it with us!
To willmatt's original question, which seems like a good discussion topic, here's ~ 2.03 inflation-adjusted cents' worth from this house.
For now, sticking with moderately significant changes made in mid-2015, which consisted of (1) reducing equity by quite a bit, concentrating it mainly in lower volatility funds with a strong tilt toward hedging foreign currency; (2) building up to about a quarter of the port in FI cef's, in munis, preferreds, and non-agency mortgages; (3) weeding out as much in hy corporates and commodity energy equity as possible; and (4) building up BBB/BB-ish muni oef's.
Converting Permanent Portfolio to Roth for 2016. Should go through today.
Other than feeling good having 70% of all my retirement money under the Roth umbrella after this, I can't think of any good reasons. Not expecting to get rich quick. Obviously like fund over very long term. Amount? Just under 10% of total.
(Edit: Went through as planned. No glitches. My estimated % was high. Actually, IRA is now about 61% in Roths and 39% Traditional. Feels good )
To willmatt's original question, which seems like a good discussion topic, here's ~ 2.03 inflation-adjusted cents' worth from this house.
For now, sticking with moderately significant changes made in mid-2015, which consisted of (1) reducing equity by quite a bit, concentrating it mainly in lower volatility funds with a strong tilt toward hedging foreign currency; (2) building up to about a quarter of the port in FI cef's, in munis, preferreds, and non-agency mortgages; (3) weeding out as much in hy corporates and commodity energy equity as possible; and (4) building up BBB/BB-ish muni oef's.
What are others doing?
Cheers, AJ
One area that seems duplicative is my accumulation of balanced funds. Currently, I own VWENX, JABAX and VTMFX. Two out of the three seems adequate to me. I really like VTMFX and its muni bond holdings, which I hold in a taxable account. So, its come down to a decision between VWENX and JABAX. I bought VWENX in a taxable account many years ago and its ballooned to my largest holding. I have a rather large capital gain with it, so its tough to sell without incurring the big cap gain. JABAX is held in a Roth IRA, so no tax issues with it.
To willmatt's original question, which seems like a good discussion topic, here's ~ 2.03 inflation-adjusted cents' worth from this house.
For now, sticking with moderately significant changes made in mid-2015, which consisted of (1) reducing equity by quite a bit, concentrating it mainly in lower volatility funds with a strong tilt toward hedging foreign currency; (2) building up to about a quarter of the port in FI cef's, in munis, preferreds, and non-agency mortgages; (3) weeding out as much in hy corporates and commodity energy equity as possible; and (4) building up BBB/BB-ish muni oef's.
What are others doing?
Cheers, AJ
May I ask which muni CEFs you are looking at? I do own CPXAX (load waived at Fidelity) for preferreds and it seems to be pretty good. FWIW.
willmatt, there are dozens of muni cef's, many of them with portfolios that are very much alike. I've got about fifteen on a watchlist to keep track, off and on, of what's in reasonable premium/discount territory. wxman's MMU is on it, along with several from Pimco, BlackRock, Nuveen, and others.
Right now I own DSM, MVF, and PML, but that's subject to change just about any time. I tend to focus on not too junky ones with relatively limited price volatility. One decent way to start a search is to check out the M* cef return and category lists - you can sort those lists by any of the metrics they provide.
Edit: for approaches to cef's and specific ideas from different perspectives, the Closed End Fund forum at M* is worth reading.
One may only need to have exposure in 3 - 4 different domestic market stock universes / sectors and strategies. 1) Small cap value universe has been academically proven to produce the highest alpha premium over 90 years marketwatch.com/story/8-lessons-from-80-years-of-market-history-2014-11-19. 2) The Nasdaq100 has been a superior growth index managed to constitute some of the the best growth companies in the world for 30 + years, and the QQQ is one of the lowest expense ETFs with exposure to it. No need to "pick" and manage individual stocks. They do it for me. 3) The biotech and energy spaces have 30 years of solid performance history. Using utilities as a risk ballast during the "rocky part of the year" fills out this portion.
As for "diversifying" with international, emerging, commodities, REITs, MLPs, etc. I think it is a ploy by the fund company industry to spread out assets to as many fund company managers as possible.
In 2016, I am sticking with my core fund, PRWCX, currently at 20% of our portfolio. For our foreign exposure, I continue to like GLIFX, as it has currency hedges and is avoiding energy. Currently we have a 12% allocation to GLIFX.
This year should be volatile, just like 2015. So we own QMNIX (10%), and will likely take an 8% position in MCXIX and an 8% position in QLEIX. As QSPIX will close to new investors later this month, I will likely take a foothold in this fund. I continue to like VMNFX, and would definitely prefer it over any and all FI funds, CEFs and OEFs, in this environment.
As for the beaten down sectors, oil should rebound, and I am looking at MLPX and RSX, but favor MLPX.
Tech has pricing power and is immune from the political bashing which will be directed at HC in this election year, so I like PRGTX and MGGIX. We will maintain our 5% position in PRHSX.
If you don't have access to PRWCX, I would consider replacing both funds with VMNVX.
Kevin
Thanks, I was looking for smaller, nimbler funds for what I expect will be challenging markets in the next year or two. GLDLX and TIVFX popped up in the screen and looked good on the surface.
Comments
Sometimes some folks just don't comprehend ... I am with you on this and feel five funds is to few.
From my perspective, I believe it to be good wisdom to spread it among a good number of funds.
I have posted my sleeve system a good number of times on the board so I will not do it again in this post unless you ask. It might be helpful for you to review it for some insight as to how I manage and split up my sizeable portfolio.
It's your money and I feel you should do what you think is best.
I agree with both of you. Yes, if you happen to choose the correct 5 funds and/or ETFs, of course that's better. But if you don't, your portfolio could take a major hit. I am fortunate because I have a place to park my cash (family business), where I can get a nice safe return. Don't know what I would do if I had to be 100% invested, or in a cash account yielding 0%.
Agree with @Old_Skeet...it's your money and you have to be able to sleep at night without constantly worrying about your portfolio. And Old Skeet, I've gotten some great ideas from your portfolio...thanks for sharing it with us!
For now, sticking with moderately significant changes made in mid-2015, which consisted of (1) reducing equity by quite a bit, concentrating it mainly in lower volatility funds with a strong tilt toward hedging foreign currency; (2) building up to about a quarter of the port in FI cef's, in munis, preferreds, and non-agency mortgages; (3) weeding out as much in hy corporates and commodity energy equity as possible; and (4) building up BBB/BB-ish muni oef's.
What are others doing?
Cheers, AJ
Other than feeling good having 70% of all my retirement money under the Roth umbrella after this, I can't think of any good reasons. Not expecting to get rich quick. Obviously like fund over very long term. Amount? Just under 10% of total.
(Edit: Went through as planned. No glitches. My estimated % was high. Actually, IRA is now about 61% in Roths and 39% Traditional. Feels good
Right now I own DSM, MVF, and PML, but that's subject to change just about any time. I tend to focus on not too junky ones with relatively limited price volatility. One decent way to start a search is to check out the M* cef return and category lists - you can sort those lists by any of the metrics they provide.
Edit: for approaches to cef's and specific ideas from different perspectives, the Closed End Fund forum at M* is worth reading.
Allocation into QQQ 12/31/2015 as per variable #1 from model https://stockmarketmap.wordpress.com/2015/12/31/market-map-model-allocates-to-equity-etf/ ( 2015 return = "underperforming" year ( cash allocation ) after 2013, 2014 were "overperforming years )
Model may instruct back to cash allocation on Feb 1 as determined by variable #2 risk profile
https://stockmarketmap.wordpress.com/2015/11/14/market-map-model-tactical-asset-allocation-using-low-expense-index-etfs-2015/
Looking for entry into Biotech and then switch for Energy in Feb
https://docs.google.com/spreadsheets/d/1zlgOYdATSzC7YrUE9yE_uY03sHBRTcLUVyKusqqv2tI/edit#gid=113856734
Still allocated to Small Cap value as of Nov 2015.
Model may indicate cash position May 1 2016, as again determined by variable #2
https://stockmarketmap.wordpress.com/2015/11/03/model-with-sell-in-may-component-allocated-to-small-cap-value/
One may only need to have exposure in 3 - 4 different domestic market stock universes / sectors and strategies.
1) Small cap value universe has been academically proven to produce the highest alpha premium over 90 years marketwatch.com/story/8-lessons-from-80-years-of-market-history-2014-11-19.
2) The Nasdaq100 has been a superior growth index managed to constitute some of the the best growth companies in the world for 30 + years, and the QQQ is one of the lowest expense ETFs with exposure to it. No need to "pick" and manage individual stocks. They do it for me.
3) The biotech and energy spaces have 30 years of solid performance history. Using utilities as a risk ballast during the "rocky part of the year" fills out this portion.
As for "diversifying" with international, emerging, commodities, REITs, MLPs, etc. I think it is a ploy by the fund company industry to spread out assets to as many fund company managers as possible.
In 2016, I am sticking with my core fund, PRWCX, currently at 20% of our portfolio. For our foreign exposure, I continue to like GLIFX, as it has currency hedges and is avoiding energy. Currently we have a 12% allocation to GLIFX.
This year should be volatile, just like 2015. So we own QMNIX (10%), and will likely take an 8% position in MCXIX and an 8% position in QLEIX. As QSPIX will close to new investors later this month, I will likely take a foothold in this fund. I continue to like VMNFX, and would definitely prefer it over any and all FI funds, CEFs and OEFs, in this environment.
As for the beaten down sectors, oil should rebound, and I am looking at MLPX and RSX, but favor MLPX.
Tech has pricing power and is immune from the political bashing which will be directed at HC in this election year, so I like PRGTX and MGGIX. We will maintain our 5% position in PRHSX.
Kevin
If you don't have access to PRWCX, I would consider replacing both funds with VMNVX.
Kevin